The RBI had set the 25 percent limit for group exposure in June 2019, and capped lenders' exposure to a single party at 20 percent.
The Reserve Bank of India (RBI) has hiked the group exposure limit for banks to 30 percent from 25 percent.
The central bank's move is intended to provide companies some relief during the COVID-19 outbreak and consequent lockdown.
"On account of the COVID-19 pandemic, debt markets and other capital market segments are witnessing heightened uncertainty. As a result, many corporates are finding it difficult to raise funds from the capital market and are predominantly dependent on funding from banks," the RBI said in a statement.
RBI Governor Shaktikanta Das also announced a repo rate cut of 40 basis points to 4 percent.
The central bank set the 25 percent limit in June 2019 and capped lenders' exposure to a single party at 20 percent.
Check our complete coverage on RBI's May 22 announcements here