How Indian Banks Share Risk On Big Real Estate Deals

Big Deals, Shared Risk

No single Indian bank will fund a ₹500 crore real estate project alone. The exposure is too high, the risk too real.

Enter Consortium Lending?

Multiple banks pool together to fund one project jointly - sharing the appraisal, the risk, and the reward in equal measure.

How Syndicated Loans Work

One lead bank structures the deal, and others take portions of risk.

How Lead Arrangers Work

One bank structures the deal and invites others to participate equally.

Escrow Accounts Protect Everyone

Project revenue flows into escrow, ensuring repayment reaches all lenders first.

RBI Guidelines Set the Limit

Single borrower exposure cannot exceed fifteen percent of capital funds.

Higher Risk, Higher Weight

Commercial real estate attracts higher capital risk weights from the RBI.

Multiple Banking Arrangement Explained

Borrower maintains separate loan accounts across different banks simultaneously.

The ECL Model Is Coming

Banks now estimate future losses upfront before any account turns bad.

REITs Are Changing Everything

Equity-based real estate trusts are reducing India's dependence on debt lending.