CONSORTIUM LENDING

WHAT IS CONSORTIUM
LENDING?
• Consortium lending is a process under which
several banks finance a borrower based on
common appraisal and documentation, and
conduct joint supervision and follow-up
exercises.
• Consortium lending was considered a must for
big-ticket loans (typically above ₹500 crore) to
stem cases of fraud and help check the rise in
bad loans in the system.
 ADVANTAGES OF CONSORTIUM
• Ease of formation
• Flexibility
• Ease of Termination
• Tax transparency
• Confidentiality
• Costs
 FAILURE OF CONSORTIUM
LENDING
• inability of banks to share information about a
‘bad’ account in a timely and adequate manner
• Banks work in isolation
• Faulty project appraisals