RBI Removes ₹10,000 Crore Lending Limit on Individual Corporate Borrowers:
The Reserve Bank of India (RBI) has withdrawn a 2016 circular that limited how much the banking system could collectively lend to a single large corporate borrower. This move marks a step towards liberalising bank lending norms while still maintaining safeguards against concentration risk through the Large Exposure Framework (LEF).According to the RBI, the corporate sector’s share in total bank lending has fallen by nearly 10% since 2016. This indicates that banks have already diversified their portfolios and are less dependent on large corporate borrowers.RBI Governor Sanjay Malhotra explained that the decision was part of the central bank’s broader goal to rationalise regulations balancing financial stability with the growth needs of the economy.
