CONSORTIUM LENDING: A CRITICAL ANALYSIS
AUTHOR – SHREYA KHOTELE, STUDENT AT AMITY LAW SCHOOL, AMITY UNIVERSITY CHHATTISGARH
BEST CITATION – SHREYA KHOTELE, CONSORTIUM LENDING: A CRITICAL ANALYSIS, ILE MULTIDISCIPLINARY JOURNAL, 3 (1) OF 2024, PG. 221-232, APIS – 3920-0007 | ISSN – 2583-7230.
ABSTRACT
Consortium lending is a pivotal mechanism in the financial sector, enabling the funding of large-scale projects that single institutions cannot undertake due to substantial capital requirements and inherent risks. This paper explores the strategic importance of consortium lending, highlighting its role in facilitating infrastructure development, corporate expansions, and significant public sector projects. It emphasizes the distribution of risk among multiple financial institutions, enhancing financial stability and robust regulatory frameworks that ensure transparency and safeguard stakeholders’ interests. The integration of blockchain and fintech technologies, along with digitalization, has further streamlined consortium processes, improving efficiency and collaboration. Additionally, the paper discusses future trends, including the focus on emerging markets, potential regulatory changes, and the emphasis on sustainability and green financing. The study concludes that consortium lending is crucial for promoting economic development, fostering financial stability, and supporting sustainable development goals. This paper provides a comprehensive analysis of consortium lending, detailing its historical development and current regulatory framework, especially focusing on the Reserve Bank of India’s guidelines. It examines the strategic alignment, governance challenges, and intellectual property concerns within consortia. The paper also addresses the technological innovations shaping consortium lending, such as blockchain and fintech, and their impact on processes. Future trends in consortium lending are explored, highlighting emerging markets, potential regulatory changes, and the increasing importance of sustainability and green financing. The paper concludes with insights into the significance of consortium lending in driving economic development and maintaining financial stability, supported by robust regulatory frameworks and technological advancements.