You are here: Home » News-IANS » Business-Economy
Business Standard

RBI caps loan exposure limits to corporates, corporate groups

IANS  |  Chennai 

The Reserve of (RBI) on Thursday capped loan exposure of banks to an corporate entity at 20 per cent and to a group at 25 per cent of the bank's available eligible capital base.

In a notification, the RBI said the sum of all exposure values or loans to a single entity must not be higher than 20 per cent of the bank's available eligible capital base at all times.

"In exceptional cases, board of banks may allow an additional 5 percent exposure of the bank's available eligible capital base. Banks shall lay down a board approved policy in this regard," it said.

In the case of a group of companies, a bank's total exposure must not be higher than 25 per cent of the available eligible capital base at all times.

According to RBI, a bank's exposure includes both on and off-balance sheet exposures included in either the banking or trading book and instruments with counterparty credit risk.

The eligible capital base for this purpose is the effective amount of Tier 1 capital.

According to RBI, any breach of the large exposure limits will be under exceptional conditions only, reported to it immediately and rectified at the earliest but not later than a period of 30 days from the date of the breach.

--IANS

vj/vd

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

RECOMMENDED FOR YOU

RBI caps loan exposure limits to corporates, corporate groups

The Reserve Bank of India (RBI) on Thursday capped loan exposure of banks to an corporate entity at 20 per cent and to a group at 25 per cent of the bank's available eligible capital base.

The Reserve of (RBI) on Thursday capped loan exposure of banks to an corporate entity at 20 per cent and to a group at 25 per cent of the bank's available eligible capital base.

In a notification, the RBI said the sum of all exposure values or loans to a single entity must not be higher than 20 per cent of the bank's available eligible capital base at all times.

"In exceptional cases, board of banks may allow an additional 5 percent exposure of the bank's available eligible capital base. Banks shall lay down a board approved policy in this regard," it said.

In the case of a group of companies, a bank's total exposure must not be higher than 25 per cent of the available eligible capital base at all times.

According to RBI, a bank's exposure includes both on and off-balance sheet exposures included in either the banking or trading book and instruments with counterparty credit risk.

The eligible capital base for this purpose is the effective amount of Tier 1 capital.

According to RBI, any breach of the large exposure limits will be under exceptional conditions only, reported to it immediately and rectified at the earliest but not later than a period of 30 days from the date of the breach.

--IANS

vj/vd

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

RBI caps loan exposure limits to corporates, corporate groups

The Reserve of (RBI) on Thursday capped loan exposure of banks to an corporate entity at 20 per cent and to a group at 25 per cent of the bank's available eligible capital base.

In a notification, the RBI said the sum of all exposure values or loans to a single entity must not be higher than 20 per cent of the bank's available eligible capital base at all times.

"In exceptional cases, board of banks may allow an additional 5 percent exposure of the bank's available eligible capital base. Banks shall lay down a board approved policy in this regard," it said.

In the case of a group of companies, a bank's total exposure must not be higher than 25 per cent of the available eligible capital base at all times.

According to RBI, a bank's exposure includes both on and off-balance sheet exposures included in either the banking or trading book and instruments with counterparty credit risk.

The eligible capital base for this purpose is the effective amount of Tier 1 capital.

According to RBI, any breach of the large exposure limits will be under exceptional conditions only, reported to it immediately and rectified at the earliest but not later than a period of 30 days from the date of the breach.

--IANS

vj/vd

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard