14 October 2019

Notifications & Circulars

Reserve Bank of India



Enhancing Credit Supply for Large Borrowers through Market Mechanism

The Reserve Bank of India released a paper on Framework for enhancing credit supply for large borrowers through market mechanism.

It noted that the absence of a ceiling on total bank borrowing by a corporate entity from the banking system resulted in banks themselves being very exposed to the largest corporations in India. The proposed Framework would be a step to mitigating said risk.

Under the proposed Framework, borrowers with aggregate sanctioned fund-based credit limits beyond the Normally Permitted Lending Limit will face additional risk weight and higher standard asset provision.

Tags : rbi large borrower risk asset

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