The Reserve Bank of India vide its Notification dated 23rd May 2020 has decided to increase the group exposure limit from 25% to 30% of the eligible capital base of a bank.
Due to COVID-19 pandemic, debt markets and other capital market segments are witnessing heightened uncertainty. As a result, many corporates are finding it difficult to raise funds from the capital market and are predominantly dependent on funding from banks. Therefore, with a view to facilitate a greater flow of resources to corporates, RBI has been decided, as a one-time measure, to increase a bank’s exposure to a group of connected counterparties from 25% to 30% of the eligible capital base of the bank.
Further the increased limit will be applicable up to June 30, 2021.
Click here to read the Notification.
