'RBI considering comments on bk exposure norms to grp cos'
The Reserve Bank is examining the comments from stakeholders to firm up norms including on the issue of providing capital by the banks to their subsidiaries, the government said.
December 07, 2012 / 18:10 IST
The Reserve Bank is examining the comments from stakeholders to firm up norms including on the issue of providing capital by the banks to their subsidiaries, the government said. "The RBI is presently considering the comments received from the stakeholders to finalise the norms that also include the issue of providing capital by banks to their subsidiaries," the Minister of State for Finance Namo Narain Meena said in written reply to the Lok Sabha.
Also Read: RBI to take steps to address any liquidity deficit: GokarnThe Minister was responding to a query on whether the RBI is considering implementing guidelines on bank exposure to their own group non-financial and financial entities. Aiming to avoid concentration of credit risk, the RBI in August proposed that a bank's exposure to its own group entities should not exceed 20 per cent of the paid-up capital and reserves.In case of all non-financial services companies and unregulated financial services companies taken together, the exposure should not exceed 10 per cent of the paid-up capital and reserves, the RBI's draft guidelines on 'Management of Intra-Group Transactions and Exposures' (ITEs), it had said. The central bank had sought comments on the draft guidelines by September 14.The draft had been prepared in the light of experience gained in monitoring of identified financial conglomerates during last few years, RBI had said. These guidelines had been proposed for all scheduled commercial banks, including foreign banks operating in India, belonging to a financial Group. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
