Banks to have concentration risk management policy on exposure to big borrowers, says RBI
This story was originally published at 19:42 IST on 4 December 2025
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--RBI issues amendments to banks' intragroup transactions, exposures
--RBI issues amendments to banks' large exposures framework
--RBI issues ammended concentration risk management norms for banks
MUMBAI – The Reserve Bank of India Thursday issued amendments to norms related to the large exposures framework and intragroup transactions and exposures of banks, under which it mandated that lenders have policies on concentration risk management of their exposures to entities to monitor risks arising from their exposures to ultra-large borrowers.
"Banks shall have policies on Concentration Risk Management of their exposures towards a single counterparty, groups of interconnected counterparties, specific sectors of the economy as also systems to monitor and address the risks emanating to them from their exposures to ultra-large borrowers who are excessively leveraged and have substantial borrowings from the banking system," it said.
The central bank said that banks can have their own criteria for deciding an ultra-large borrower, and should take into account the overall borrowings of such entities from the banking system for credit assessment of such borrowers.
The RBI said the amendments were made in order to define prudential treatment of exposures of foreign bank branches operating in India to their group entities. The amendment also clarified on some methodological aspects relating to calculation of large exposures framework and intragroup transactions and exposures.
Further, the central bank exempted subsidiaries of head offices of Indian branches of foreign global-systemically important bank from 20% of eligible capital base and exposure limit on any other bank and 25% of eligible capital base. Similar exemptions have been made for subsidiaries of head offices of Indian branches of foreign non-global-systemically important banks. The amended norms come into effect from Apr. 1. End
Reported by Pratiksha
Edited by Ashish Shirke
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