RBI caps group entity exposure limit for banks at 25%
Latest News »
- Barcelona terror attack leaves 13 dead, 100 injured, suspects killed, IS claims responsibility
- After buying Ibibo, MakeMyTrip is spending more on promotions than its net revenue
- Grasim Industries: holding company discount remains a concern
- NBCC investors wait for revenue growth with indomitable faith
- Opening bell: Asian markets open lower; PNB, HDFC Bank, Infosys in news
Mumbai: The Reserve Bank of India 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 RBI allows a bank to lend up to 15% of its capital funds to a single borrower and 40% to a group.
The central bank 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 1 April 2019. Reuters