RBI🏦 Recommends ‘Specified Borrowers’

  |   India News

By Fråst🐺

The Reserve Bank of India🏦 (RBI) is attempting to curb⛔ the banking sector’s exposure to large companies🏢 and is proposing that banks put aside extra capital💰 when companies borrow more than a certain limit from them. The RBI🏦 said💬, “While single and group exposure norms put a ceiling on the amount an entity can borrow from a single bank, there is no ceiling on total bank borrowing by a corporate entity. This has resulted in banks collectively having very large exposures to some of the large corporates in India, particularly in the power/ infrastructure, housing finance and steel sectors/ industries.” To avoid a high📈 concentration of credit risk⚠, the RBI🏦 has suggested the creation of a new segment of borrowers💰 called “specified borrower,” which is anyone having an aggregate fund-based credit limit of ₹25K cr💰 in FY18, ₹15K cr💰 in FY19 and ₹10K cr 💰in FY20 and onwards.

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