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RBI caps group entity exposure limit for banks at 25%

RBI allows a bank to lend up to 15% of its capital funds to a single borrower and 40% to a grou

Reuters  |  Mumbai 

An image of RBI headquarters in Mumbai (Photo: Kamlesh Pednekar)
An image of RBI headquarters in Mumbai (Photo: Kamlesh Pednekar)

The Reserve of said on Thursday it will cap banks' exposure to a single entity to 20% of a lender's capital base and to 25% limit to a group of connected entities, according to a circular on Thursday.

Currently, the allows a to lend up to 15% of its capital funds to a single borrower and 40% to a group.

The central also said that banks must classify the sum of all exposures of 10% or above as "large exposure" and report them to the RBI.

The rules will be effective April 1, 2019.

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RBI caps group entity exposure limit for banks at 25%

RBI allows a bank to lend up to 15% of its capital funds to a single borrower and 40% to a grou

RBI allows a bank to lend up to 15% of its capital funds to a single borrower and 40% to a grou
The Reserve of said on Thursday it will cap banks' exposure to a single entity to 20% of a lender's capital base and to 25% limit to a group of connected entities, according to a circular on Thursday.

Currently, the allows a to lend up to 15% of its capital funds to a single borrower and 40% to a group.

The central also said that banks must classify the sum of all exposures of 10% or above as "large exposure" and report them to the RBI.

The rules will be effective April 1, 2019.
image
Business Standard
177 22

RBI caps group entity exposure limit for banks at 25%

RBI allows a bank to lend up to 15% of its capital funds to a single borrower and 40% to a grou

The Reserve of said on Thursday it will cap banks' exposure to a single entity to 20% of a lender's capital base and to 25% limit to a group of connected entities, according to a circular on Thursday.

Currently, the allows a to lend up to 15% of its capital funds to a single borrower and 40% to a group.

The central also said that banks must classify the sum of all exposures of 10% or above as "large exposure" and report them to the RBI.

The rules will be effective April 1, 2019.

image
Business Standard
177 22