Exposure Norms for Financial Institutions
This Master Circular outlines the exposure norms for financial institutions, superseding previous instructions.
The circular applies to all financial institutions, including banks, non-banking financial companies (NBFCs), and other financial entities.
Key definitions include:
- Capital Funds: includes tier I and tier II capital
- Infrastructure Projects/Infrastructure Lending: projects that are critical to the economy
- Group Borrowers: borrowers with common ownership or management
- Net Owned Funds in respect of NBFCs: net owned funds as per RBI guidelines
Exposure ceilings are set for:
- Single/Individual Borrowers: 15% of capital funds
- Group Borrowers: 20% of capital funds
- Bridge Loans/Interim Finance: 10% of capital funds
- Working Capital Finance: 10% of capital funds
- Revolving Underwriting Facility: 10% of capital funds
- Lending to NBFCs: varies by category of NBFC
The circular provides detailed guidelines for each category of financial institution.
Chat with the Master Circular:
Download: Master Circular – Exposure Norms for Financial Institutions