MANU/RMIC/0058/2019

Ministry : Reserve Bank of India

Department/Board : Department of Banking Regulation

Circular No. : DBR.No.BP.BC.43/21.01.003/2018-2019
                   RBI/2018-2019/196

Date : 03.06.2019

Notification/ Circulars Referred : Circulars DBR.No.BP.BC.43/21.01.003/2016-17 dated December 01, 2016 MANU/RMIC/0213/2016;DBR.No.BP.BC.31/21.01.003/2018-19 dated April 01, 2019 MANU/RMIC/0040/2019

Citing Reference:
Circulars DBR.No.BP.BC.43/21.01.003/2016-17 dated December 01, 2016 MANU/RMIC/0213/2016  Referred

DBR.No.BP.BC.31/21.01.003/2018-19 dated April 01, 2019 MANU/RMIC/0040/2019  Referred

All Scheduled Commercial Banks
(Excluding Regional Rural Banks)

Dear Sir/Madam,

Large Exposures Framework

Please refer to the instructions contained in circulars DBR.No.BP.BC.43/21.01.003/2016-17 dated December 01, 2016 and DBR.No.BP.BC.31/21.01.003/2018-19 dated April 01, 2019 on "Large Exposures Framework (LEF)".

2. In order to capture exposures and concentration risk more accurately and to align the above instructions with international norms, the following amendments have been incorporated in the above mentioned instructions:

i) Exclusion of entities connected with the sovereign from definition of group of connected counterparties.

ii) Introduction of economic interdependence criteria in definition of connected counterparties.

iii) Mandatory application of look-through approach (LTA) in determination of relevant counterparties in case of collective investment undertakings, securitisation vehicles and other structures.