The Reserve Bank of India (RBI) has decided to remove the ₹10,000 crore ceiling imposed on bank loans to each corporate entity and said if concentration risk increases, the regulator will take macro-prudential measures to tackle the same.

“The Guidelines on Enhancing Credit Supply for Large Borrowers through Market Mechanism were introduced in August 2016 with an objective to address the concentration risk arising from the aggregate credit exposure of the banking system to a single large corporate and encourage such large corporates to diversify their sources of funding. Upon review, considering, inter-alia, the changes evident in the profile of bank funding to corporate sector since the introduction of the Guidelines, it is proposed to withdraw the guidelines,” the RBI said.

While the

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