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Large Exposure Framework (LEF) Guidelines : RBI

Kumari Sonali

Large Exposure Framework (LEF) Guidelines : RBI

Reserve Bank of India has dismissed concerns about the “exposure” of Indian banks to the Gautam Adani-led conglomerate.

  • RBI’s observations has a Central Repository of Information on Large Credits (CRILC) database system where the banks report their exposure of ₹5 crores and above which is used for monitoring purposes.
  • The banking sector remains resilient and stable: Various parameters relating to capital adequacy, asset quality, liquidity, provision coverage and profitability are healthy.
  • Banks are also in compliance with the Large Exposure Framework (LEF) guidelines issued by the RBI
  • Large Exposure Framework (LEF) guidelines are guidelines aimed to monitor and limit losses of a bank from a client or corporation. It is based on the 2014 Basel guidelines.
  • An exception to LEF: Banks need not report exposure if the loans are taken from RBI, is guaranteed by the Government of India or have Intra-day interbank exposures or deposits are maintained by NABARD (due to shortfall in target for Priority sector Lending)

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