Exposure Norms Guidelines
The Reserve Bank of India (RBI) has issued a Master Circular on Exposure Norms, outlining guidelines for credit exposures to single/group borrowers.
Ceiling Limits: The circular sets ceilings for credit exposures to single/group borrowers, including:
- Exposures to Non-Banking Financial Companies (NBFCs)
- Lending under Consortium Arrangements
- Bills discounted under Letter of Credit (LC)
- Disinvestment Programme of the Government of India
Exemptions: The circular provides exemptions for certain credit exposures, including:
- Rehabilitation of Sick/Weak Industrial Units
- Food credit
- Guarantee by the Government of India
- Loans against Own Term Deposits
- Exposure on NABARD
Definitions: The circular defines key terms, including:
- Exposure
- Measurement of Credit Exposure of Derivative Products
- Credit Conversion Factors (CCF) for market-related off-balance sheet items
- Residual Maturity
- Credit conversion factors for Interest Rate Contracts, Exchange Rate Contracts, and Gold
The circular aims to provide a comprehensive framework for banks to manage their credit exposures and ensure prudent risk management practices.
Chat with the Master Circular:
Download: Master Circular – Exposure Norms