Enhancing Credit Supply for Large Borrowers through Market Mechanism- (Reserve Bank of India) (12 May 2016)

Banking

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