The Reserve Bank of India on Thursday issued its final Concentration Risk Management Directions, 2025, bringing into force updated rules governing how banks manage large exposures and intra-group lending risks.

The framework, first proposed on October 1 for public feedback, now takes effect immediately and replaces the existing concentration risk guidelines.

Under the revised Large Exposures Framework, a bank’s exposure to a single counterparty cannot exceed 20% of its eligible Tier-1 capital base, with Boards permitted to allow an additional 5% in exceptional cases. Exposure to a group of connected counterparties has been capped at 25% of Tier-1 capital.

The Directions also formalise prudential norms for large borrowers. A “specified borrower” is one whose Aggregate Sanctioned Credit L

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