OPEN APP
Home >Industry >RBI caps group entity exposure limit for banks at 25%

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

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Close
×
Edit Profile
My ReadsRedeem a Gift CardLogout