RBI moves to curb concentrated credit risk
Prudential measures designed to tackle concentration risk
The Reserve Bank of India (RBI) is hoping to shore up the banking system and encourage use of capital markets by imposing new prudential standards on banks' largest exposures.
The RBI is concerned by the build-up of a "high concentration" of credit risk in the banking sector. A study of 77,036 firms with large borrowings from banks found many are "excessively leveraged", while the banking sector's exposure to such companies is "excessively high".
Though the RBI has already imposed limits on how
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