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RBI raises banks' aggregate exposure limit for small biz to Rs 7.5 cr

The notification follows an announcement made in this regard on October 9 after the monetary policy committee meeting

Topics
RBI | Banks | SMBs

Press Trust of India  |  Mumbai 

RBI
RBI has also decided that the enhanced HTM limit would be restored to 19.5 per cent in a phased manner, beginning from the quarter ending June 30, 2022.

In a bid to increase credit flow to small businesses, the on Monday raised banks' maximum aggregate retail exposure limit to entities with turnover up to Rs 50 crore to Rs 7.5 crore, up from Rs 5 crore.

The risk weight of 75 per cent will apply to all fresh exposures and also to existing exposures where incremental exposure may be taken by the up to the revised limit of Rs 7.5 crore, the Reserve Bank of India (RBI) said in a release.

"In order to reduce the cost of credit for this segment consisting of individuals and small businesses (i.e. with turnover of upto Rs 50 crore), and also to harmonise with the Basel guidelines, it has been decided that the above threshold limit of Rs 5 crore for aggregated retail exposure to a counterparty shall stand increased to Rs 7.5 crore...", the Reserve Bank said.

The notification follows an announcement made in this regard on October 9 after the meeting.

In another notification, the said it has been decided to extend the dispensation of the enhanced Held to Maturity (HTM) limit of 22 per cent for SLR securities acquired between September 1, 2020 and March 31, 2021, up to March 31, 2022. may continue to hold such excess SLR securities in HTM category upto March 31, 2022.

has also decided that the enhanced HTM limit would be restored to 19.5 per cent in a phased manner, beginning from the quarter ending June 30, 2022.

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First Published: Mon, October 12 2020. 23:48 IST
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