RBI seeks comments on Draft Large Exposures Framework

The Reserve Bank of India seeks comments on Draft Large Exposures Framework.

The salient features of the proposed Large Exposures (LE) Framework include:

  • The Large Exposure (LE) limit in respect of each counterparty and group of connected counterparties, under normal circumstances, will be capped at 20 percent and 25 percent respectively of the eligible capital base
  • The eligible capital base will be defined as the Tier 1 capital of the bank as against ‘Capital Funds’ at present.
  • A group of connected counterparties will be identified on the basis of ‘control’ as well as ‘economic dependence’ criteria.
  • The proposed LE framework will be fully applicable with effect from March 31, 2019.
  • Comments on the draft framework may be forwarded to the Chief General Manager, Department of Banking Regulation, Reserve Bank of India, Central Office, Shahid Bhagat Singh Marg, Mumbai 400001 latest by September 15, 2016.

To read the Draft, click HERE

Reserve Bank of India

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