RBI/2010-11/68
DBOD No.Dir.BC. 14/13.03.00/ 2010-11
July 1, 2010
Ashadha 10,1932 (Saka)
All Scheduled Commercial Banks
(excluding RRBs)
Dear Sir / Madam
Master Circular – Exposure Norms
Please refer to the Master Circular DBOD No. Dir. BC. 15/13.03.00/2008-09
dated July 1, 2009 consolidating the instructions / guidelines issued to banks
till that date relating to Exposure Norms. The Master Circular has been suitably
updated by incorporating the instructions issued up to June 30, 2010 and has
also been placed on the RBI website (http://www.rbi.org.in). A copy of the
Master Circular is enclosed .
Yours faithfully
(A.K.Khound)
Chief General Manager
Encl: as above
CONTENTS
Master Circular on Exposure Norms
A. Purpose
This Master Circular provides a framework of the rules/regulations/instructions
issued by the Reserve Bank of India to Scheduled Commercial Banks relating to
credit exposure limits for individual / group borrowers and credit exposure to
specific industry or sectors, and the capital market exposure of banks.
B. Classification
A statutory guideline issued by the Reserve Bank in exercise of the powers
conferred by the Banking Regulation Act, 1949.
C. Previous instructions
This Master Circular consolidates and updates the instructions on the above
subject contained in the circulars listed in Annex 4.
D. Application
To all scheduled commercial banks, excluding Regional Rural Banks. Structure
1. INTRODUCTION
2. GUIDELINES
2.1 Credit Exposures to Individual / Group Borrowers
2.2 Credit Exposure to Industry or Certain Sectors
2.3 Banks' Exposure to Capital Market – Rationalisation of Norms
2.4 Financing of equities and investments in shares
2.5 Risk Management and Internal Control System
2.6 Valuation and Disclosure
2.7 Cross holding of capital among banks / financial institutions
2.8 Banks' Exposure to Commodity Markets – Margin Requirements
2.9 Limits on exposure to unsecured guarantees and unsecured advances
2.10 'Safety Net' Schemes for Public Issues of Shares, Debentures, etc.
3 ANNEX
Annex 1 Definition of infrastructure lending and list of items included under
infrastructure sector
Annex 2 List of All-India Financial Institutions guaranteeing bonds of corporate
Annex 3 List of All-India Financial Institutions whose instruments are exempted
from Capital Market Exposure ceiling
Annex 4 List of circulars consolidated
1. INTRODUCTION
As a prudential measure aimed at better risk management and avoidance of
concentration of credit risks, the Reserve Bank of India has advised the banks
to fix limits on their exposure to specific industry or sectors and has
prescribed regulatory limits on banks’ exposure to individual and group
borrowers in India. In addition, banks are also required to observe certain
statutory and regulatory exposure limits in respect of advances against /
investments in shares, convertible debentures /bonds, units of equity-oriented
mutual funds and all exposures to Venture Capital Funds (VCFs). Banks should
comply with the following guidelines relating to exposure norms.
2. GUIDELINES
2.1 Credit Exposures to Individual/Group Borrowers
2.1.1 Ceilings
2.1.1.1 The exposure ceiling limits would be 15 percent of capital funds in case
of a single borrower and 40 percent of capital funds in the case of a borrower
group. The capital funds for the purpose will comprise of Tier I and Tier II
capital as defined under capital adequacy standards (please also refer to
paragraph 2.1.3.5 of this Master Circular).
2.1.1.2 Credit exposure to a single borrower may exceed the exposure norm of 15
percent of the bank's capital funds by an additional 5 percent (i.e. up to 20
percent) provided the additional credit exposure is on account of extension of
credit to infrastructure projects. Credit exposure to borrowers belonging to a
group may exceed the exposure norm of 40 percent of the bank's capital funds by
an additional 10 percent (i.e., up to 50 percent), provided the additional
credit exposure is on account of extension of credit to infrastructure projects.
The definition of infrastructure lending and the list of items included under
infrastructure sector are furnished in Annex 1.
2.1.1.3 In addition to the exposure permitted under paragraphs 2.1.1.1 and
2.1.1.2 above, banks may, in exceptional circumstances, with the approval of
their Boards, consider enhancement of the exposure to a borrower (single as well
as group) up to a further 5 percent of capital funds subject to the borrower
consenting to the banks making appropriate disclosures in their Annual Reports.
2.1.1.4 With effect from May 29, 2008, the exposure limit in respect of single
borrower has been raised to twenty five percent of the capital funds, only in
respect of Oil Companies who have been issued Oil Bonds (which do not have SLR
status) by Government of India. In addition to this, banks may in exceptional
circumstances, as hitherto, in terms of paragraph 2.1.1.3 of the Master
Circular, consider enhancement of the exposure to the Oil Companies up to a
further 5 percent of capital funds.
2.1.1.5 The bank should make appropriate disclosures in the ‘Notes on account’
to the annual financial statements in respect of the exposures where the bank
had exceeded the prudential exposure limits during the year.
2.1.1.6 Exposures to NBFCs
The exposure (both lending and investment, including off balance sheet
exposures) of a bank to a single NBFC / NBFC-AFC (Asset Financing Companies)
should not exceed 10% / 15% respectively, of the bank's capital funds as per its
last audited balance sheet. Banks may, however, assume exposures on a single
NBFC / NBFC-AFC up to 15%/20% respectively, of their capital funds provided the
exposure in excess of 10%/15% respectively, is on account of funds on-lent by
the NBFC / NBFC-AFC to the infrastructure sector. Exposure of a bank to
Infrastructure Finance Companies (IFCs) should not exceed 15% of its capital
funds as per its last audited balance sheet, with a provision to increase it to
20% if the same is on account of funds on-lent by the IFCs to the infrastructure
sector. Further, banks may also consider fixing internal limits for their
aggregate exposure to all NBFCs put together. Infusion of capital funds after
the published balance sheet date may also be taken into account for the purpose
of reckoning capital funds. Banks should obtain an external auditor’s
certificate on completion of the augmentation of capital and submit the same to
the Reserve Bank of India (Department of Banking Supervision) before reckoning
the additions to capital funds.
2.1.1.7 Lending under Consortium Arrangements
The exposure limits will also be applicable to lending under consortium
arrangements.
2.1.1.8 Bills discounted under Letter of Credit (LC)
Bills purchased / discounted / negotiated under LC (where the payment to the
beneficiary is not made 'under reserve') will be treated as an exposure on the
LC issuing bank and not on the borrower. In the case of negotiations ' under
reserve' the exposure should be treated as on the borrower.
2.1.2 Exemptions
2.1.2.1 Rehabilitation of Sick/Weak Industrial Units
The ceilings on single/group exposure limits are not applicable to
existing/additional credit facilities (including funding of interest and
irregularities) granted to weak/sick industrial units under rehabilitation
packages.
2.1.2.2 Food credit
Borrowers, to whom limits are allocated directly by the Reserve Bank for food
credit, will be exempt from the ceiling.
2.1.2.3 Guarantee by the Government of India
The ceilings on single /group exposure limit would not be applicable where
principal and interest are fully guaranteed by the Government of India.
2.1.2.4 Loans against Own Term Deposits
Loans and advances (both funded and non-funded facilities) granted against the
security of a bank’s own term deposits may not be reckoned for computing the
exposure to the extent that the bank has a specific lien on such deposits.
2.1.2.5 Exposure on NABARD
The ceiling on single/group borrower exposure limit will not be applicable to
exposure assumed by banks on NABARD. The individual banks are free to determine
the size of the exposure to NABARD as per the policy framed by their respective
Board of Directors. However, banks may note that there is no exemption from the
prohibitions relating to investments in unrated non-SLR securities prescribed in
terms of the Master Circular on Prudential Norms for Classification, Valuation
and Operations of Investment Portfolio by Banks, as amended from time to time.
2.1.3 Definitions
2.1.3.1 Exposure
Exposure shall include credit exposure (funded and non-funded credit limits) and
investment exposure (including underwriting and similar commitments). The
sanctioned limits or outstandings, whichever are higher, shall be reckoned for
arriving at the exposure limit. However, in the case of fully drawn term loans,
where there is no scope for re-drawal of any portion of the sanctioned limit,
banks may reckon the outstanding as the exposure.
2.1.3.2 Measurement of Credit Exposure of Derivative Products
For the purpose of exposure norms, banks shall compute their credit exposures,
arising on account of the interest rate & foreign exchange derivative
transactions and gold, using the 'Current Exposure Method', as detailed below.
While computing the credit exposure banks may exclude 'sold options', provided
the entire premium / fee or any other form of income is received / realised.
Current Exposure Method
- The credit equivalent amount of a market related off-balance sheet
transaction calculated using the current exposure method is the sum of current
credit exposure and potential future credit exposure of these contracts. While
computing the credit exposure banks may exclude 'sold options', provided the
entire premium / fee or any other form of income is received / realized.
- Current credit exposure is defined as the sum of the positive
mark-to-market value of these contracts. The Current Exposure Method requires
periodical calculation of the current credit exposure by marking these contracts
to market, thus capturing the current credit exposure.
- Potential future credit exposure is determined by multiplying the notional
principal amount of each of these contracts irrespective of whether the contract
has a zero, positive or negative mark-to-market value by the relevant add-on
factor indicated below according to the nature and residual maturity of the
instrument.
|
CCF for market related off-balance sheet items |
| Residual Maturity
|
Credit conversion factors |
| Interest Rate Contracts |
Exchange Rate Contracts & Gold |
| One year or less |
0.50% |
2.00% |
| Over one year to five years |
1.00% |
10.00% |
| Over five years |
3.00% |
15.00% |
- For contracts with multiple exchanges of principal, the add-on factors are
to be multiplied by the number of remaining payments in the contract.
- For contracts that are structured to settle outstanding exposure following
specified payment dates and where the terms are reset such that the market value
of the contract is zero on these specified dates, the residual maturity would be
set equal to the time until the next reset date. However, in the case of
interest rate contracts which have residual maturities of more than one year and
meet the foregoing criteria, the CCF or ';add-on factor'; applicable shall be
subject to a floor of 1.00 per cent.
- No potential future credit exposure would be calculated for single currency
floating / floating interest rate swaps; the credit exposure on these contracts
would be evaluated solely on the basis of their mark-to-market value.
- Potential future exposures should be based on effective rather than
apparent notional amounts. In the event that the stated notional amount is
leveraged or enhanced by the structure of the transaction, banks must use the
effective notional amount when determining potential future exposure. For
example, a stated notional amount of USD 1 million with payments based on an
internal rate of two times the BPLR would have an effective notional amount of
USD 2 million.
2.1.3.3.Credit Exposure
Credit exposure comprises of the following elements:
(a) all types of funded and non-funded credit limits.
(b) facilities extended by way of equipment leasing, hire purchase finance and
factoring services.
2.1.3.4 Investment Exposure
a) Investment exposure comprises of the following elements:
- investments in shares and debentures of companies.
- investment in PSU bonds
- investments in Commercial Papers (CPs).
b) Banks’ / FIs’ investments in debentures/ bonds / security receipts /
pass-through certificates (PTCs) issued by a SC / RC as compensation consequent
upon sale of financial assets will constitute exposure on the SC / RC. In view
of the extraordinary nature of the event, banks / FIs will be allowed, in the
initial years, to exceed the prudential exposure ceiling on a case-to-case
basis.
c) The investment made by the banks in bonds and debentures of corporates which
are guaranteed by a PFI1 (as per list given in Annex 2) will be treated as an
exposure by the bank on the PFI and not on the corporate.
d) Guarantees issued by the PFI to the bonds of corporates will be treated as an
exposure by the PFI to the corporates to the extent of 50 percent, being a
non-fund facility, whereas the exposure of the bank on the PFI guaranteeing the
corporate bond will be 100 percent. The PFI before guaranteeing the
bonds/debentures should, however, take into account the overall exposure of the
guaranteed unit to the financial system.
2.1.3.5 Capital Funds
Capital funds for the purpose will comprise of Tier I and Tier II capital as
defined under capital adequacy standards and as per the published accounts as on
March 31 of the previous year. However, the infusion of capital under Tier I and
Tier II, either through domestic or overseas issue (in the case of branches of
foreign banks operating in India, capital funds received by them from their Head
Office in accordance with the provisions of Master Circular on New Capital
Adequacy Framework as amended from time to time), after the published balance
sheet date will also be taken into account for determining the exposure ceiling.
Other accretions to capital funds by way of quarterly profits etc. would not be
eligible to be reckoned for determining the exposure ceiling. Banks are also
prohibited from taking exposure in excess of the ceiling in anticipation of
infusion of capital at a future date.
2.1.3.6 Group
a) The concept of 'Group' and the task of identification of the borrowers
belonging to specific industrial groups is left to the perception of the
banks/financial institutions. Banks/financial institutions are generally aware
of the basic constitution of their clientele for the purpose of regulating their
exposure to risk assets. The group to which a particular borrowing unit belongs,
may, therefore, be decided by them on the basis of the relevant information
available with them, the guiding principle being commonality of management and
effective control. In so far as public sector undertakings are concerned, only
single borrower exposure limit would be applicable.
b) In the case of a split in the group, if the split is formalised the splinter
groups will be regarded as separate groups. If banks and financial institutions
have doubts about the bona fides of the split, a reference may be made to RBI
for its final view in the matter to preclude the possibility of a split being
engineered in order to prevent coverage under the Group Approach.
2.1.4 Review
An annual review of the implementation of exposure management measures may be
placed before the Board of Directors before the end of June.
2.2. Credit Exposure to Industry and certain Sectors
2.2.1 Internal Exposure Limits
2.2.1.1 Fixing of Sectoral Limits
Apart from limiting the exposures to an individual or a Group of borrowers, as
indicated above, banks may also consider fixing internal limits for aggregate
commitments to specific sectors, e.g. textiles, jute, tea, etc., so that the
exposures are evenly spread over various sectors. These limits could be fixed by
the banks having regard to the performance of different sectors and the risks
perceived. The limits so fixed may be reviewed periodically and revised, as
necessary.
2.2.1.2 Unhedged Foreign Currency Exposure of Corporates
To ensure that each bank has a policy that explicitly recognises and takes
account of risks arising out of foreign exchange exposure of their clients,
foreign currency loans above US $10 million, or such lower limits as may be
deemed appropriate vis-à-vis the banks’ portfolios of such exposures, should be
extended by banks only on the basis of a well laid out policy of their Boards
with regard to hedging of such foreign currency loans. Further, the policy for
hedging, to be framed by their boards, may consider, as appropriate for
convenience, excluding the following:
- Where forex loans are extended to finance exports, banks may not insist on
hedging but assure themselves that such customers have uncovered receivables to
cover the loan amount.
- Where the forex loans are extended for meeting forex expenditure.
Banks are also advised that the Board policy should cover unhedged foreign
exchange exposure of all their clients including Small and Medium Enterprises (SMEs).
Further, for arriving at the aggregate unhedged foreign exchange exposure of
clients, their exposure from all sources including foreign currency borrowings
and External Commercial Borrowings should be taken into account.
Banks which have large exposures to clients should monitor and review on a
monthly basis, through a suitable reporting system, the unhedged portion of the
foreign currency exposures of those clients, whose total foreign currency
exposure is relatively large ( say, about US $ 25 million or its equivalent).
The review of unhedged exposure for SMEs should also be done on a monthly basis.
In all other cases, banks are required to put in place a system to monitor and
review such position on a quarterly basis.
In the case of consortium/multiple banking arrangements, the lead role in
monitoring unhedged foreign exchange exposure of clients, as indicated above,
would have to be assumed by the consortium leader/bank having the largest
exposure.
2.2.1.3 Exposure to Real Estate
- Banks should frame comprehensive prudential norms relating to the ceiling on
the total amount of real estate loans, single/group exposure limits for such
loans, margins, security, repayment schedule and availability of supplementary
finance and the policy should be approved by the banks' Boards.
- While appraising loan proposals involving real estate, banks should ensure
that the borrowers have obtained prior permission from government / local
governments / other statutory authorities for the project, wherever required. In
order that the loan approval process is not hampered on account of this, while
the proposals could be sanctioned in the normal course, the disbursements should
be made only after the borrower has obtained requisite clearances from the
government authorities. Banks' Boards may also consider incorporation of aspects
relating to adherence to National Building Code (NBC) in their policies on
exposure to real estate. The information regarding the NBC can be accessed from
the website of Bureau of Indian Standards (www.bis.org.in).
- The exposure of banks to entities for setting up Special Economic Zones (SEZs)
or for acquisition of units in SEZs which includes real estate would be treated
as exposure to commercial real estate sector for the purpose of risk weight and
capital adequacy from a prudential perspective. Banks would, therefore, have to
make provisions, as also assign appropriate risk weights for such exposures, as
per the existing guidelines. The above exposure may be treated as exposure to
Infrastructure sector only for the purpose of Exposure norms which provide some
relaxations for the Infrastructure sector. In this connection, attention is
invited to paragraph 3 of our circular DBOD. BP.BC. No. 42/08.12.015/2009-10
dated September 9, 2009 .
- While framing the bank's policy, the guidelines issued by the Reserve Bank
should be taken into account. Banks should ensure that the bank credit is used
for productive construction activity and not for any activity connected with
speculation in real estate.
2.2.2
Exposure to Leasing, Hire Purchase and Factoring Services
Banks have been permitted to undertake leasing, hire purchase and factoring
activities departmentally. Where banks undertake these activities
departmentally, they should maintain a balanced portfolio of equipment leasing,
hire purchase and factoring services vis-à-vis the aggregate credit. Their
exposure to each of these activities should not exceed 10 percent of total
advances.
2.2.3
Exposure to Indian Joint Ventures/Wholly-owned Subsidiaries Abroad and
Overseas Step-down Subsidiaries of Indian Corporates
2.2.3.1 Banks are allowed to extend credit/non-credit facilities (viz. letters
of credit and guarantees) to Indian Joint Ventures/Wholly-owned Subsidiaries
abroad and step-down subsidiaries which are wholly owned by the overseas
subsidiaries of Indian Corporates. Banks are also permitted to provide at their
discretion, buyer's credit/acceptance finance to overseas parties for
facilitating export of goods & services from India.
2.2.3.2 The above exposure will, however, be subject to a limit of 20 percent of
banks’ unimpaired capital funds (Tier I and Tier II capital), subject to the
following conditions:
- Loan will be granted only to those joint ventures where the holding by the
Indian company is more than 51%.
- Proper systems for management of credit and interest rate risks arising out
of such cross border lending are in place.
- While extending such facilities, banks will have to comply with Section 25
of the Banking Regulation Act, 1949, in terms of which the assets in India of
every banking company at the close of business on the last Friday of every
quarter shall not be less than 75 percent of its demand and time liabilities in
India. In other words, aggregate assets outside India should not exceed 25
percent of the bank's demand and time liabilities in India.
- The resource base for such lending should be funds held in foreign currency
accounts such as FCNR(B), EEFC, RFC, etc. in respect of which banks have to
manage exchange risk.
- Maturity mismatches arising out of such transactions are within the overall
gap limits approved by RBI.
- Adherence to all existing safeguards / prudential guidelines relating to
capital adequacy, exposure norms etc. applicable to domestic credit / non-credit
exposures.
- The set up of the step-down subsidiary should be such that banks can
effectively monitor the facilities granted by them.
2.2.3.3 Further, the loan policy for such credit / non-credit facility should
be, inter alia, in keeping with the following:
a. Grant of such loans is based on proper appraisal and commercial viability of
the projects and not merely on the reputation of the promoters backing the
project. Non-fund based facilities should be subjected to the same rigorous
scrutiny as fund-based limits.
b. The countries where the joint ventures / wholly owned subsidiaries are
located should have no restrictions applicable to these companies in regard to
obtaining foreign currency loans or for repatriation, etc. and should permit
non-resident banks to have legal charge on securities / assets abroad and the
right of disposal in case of need.
2.2.3.4 Banks should also comply with all existing safeguards/prudential
guidelines relating to capital adequacy, and exposure norms indicated in
paragraph 2.1, ibid.
2.3
Banks’ Exposure to Capital Markets – Rationalisation of Norms
As announced in the Mid-Term Review of Annual Policy Statement for the year
2005-2006, the prudential capital market exposure norms prescribed for banks
have been rationalized in terms of base and coverage. Accordingly, the existing
guidelines on banks’ exposure to capital markets were modified and the revised
guidelines, which came into effect from April 1, 2007, are as under.
2.3.1 Components of Capital Market Exposure (CME)
Banks' capital market exposures would include both their direct exposures and
indirect exposures. The aggregate exposure (both fund and non-fund based) of
banks to capital markets in all forms would include the following:
- direct investment in equity shares, convertible bonds, convertible debentures
and units of equity-oriented mutual funds the corpus of which is not exclusively
invested in corporate debt;
- advances against shares/bonds/debentures or other securities or on clean
basis to individuals for investment in shares (including IPOs/ESOPs),
convertible bonds, convertible debentures, and units of equity-oriented mutual
funds;
- advances for any other purposes where shares or convertible bonds or
convertible debentures or units of equity oriented mutual funds are taken as
primary security;
- advances for any other purposes to the extent secured by the collateral
security of shares or convertible bonds or convertible debentures or units of
equity oriented mutual funds i.e. where the primary security other than
shares/convertible bonds/convertible debentures/units of equity oriented mutual
funds does not fully cover the advances;
- secured and unsecured advances to stockbrokers and guarantees issued on
behalf of stockbrokers and market makers;
- loans sanctioned to corporates against the security of shares / bonds/
debentures or other securities or on clean basis for meeting promoter’s
contribution to the equity of new companies in anticipation of raising
resources;
- bridge loans to companies against expected equity flows/issues;
- underwriting commitments taken up by the banks in respect of primary issue
of shares or convertible bonds or convertible debentures or units of equity
oriented mutual funds. However, with effect from April 16, 2008, banks may
exclude their own underwriting commitments, as also the underwriting commitments
of their subsidiaries, through the book running process for the purpose of
arriving at the capital market exposure of the solo bank as well as the
consolidated bank. The position in this regard would be reviewed at a future
date.
- financing to stockbrokers for margin trading;
- all exposures to Venture Capital Funds (both registered and unregistered).
2.3.2 Limits on Banks’ Exposure to Capital Markets
2.3.2.1 Statutory limit on shareholding in companies
In terms of Section 19(2) of the Banking Regulation Act, 1949, no banking
company shall hold shares in any company, whether as pledgee, mortgagee or
absolute owner, of an amount exceeding 30 percent of the paid-up share capital
of that company or 30 percent of its own paid-up share capital and reserves,
whichever is less, except as provided in sub-section (1) of Section 19 of the
Act. Shares held in demat form should also be included for the purpose of
determining the exposure limit. This is an aggregate holding limit for each
company. While granting any advance against shares, underwriting any issue of
shares, or acquiring any shares on investment account or even in lieu of debt of
any company, these statutory provisions should be strictly observed.
2.3.2.2 Regulatory Limit
A Solo Basis
The aggregate exposure of a bank to the capital markets in all forms (both fund
based and non-fund based) should not exceed 40 per cent of its net worth (as
defined in paragraph 2.3.3), as on March 31 of the previous year. Within this
overall ceiling, the bank’s direct investment in shares, convertible bonds /
debentures, units of equity-oriented mutual funds and all exposures to Venture
Capital Funds (VCFs) [both registered and unregistered] should not exceed 20 per
cent of its net worth.
B Consolidated Basis
The aggregate exposure of a consolidated bank to capital markets (both fund
based and non-fund based) should not exceed 40 per cent of its consolidated net
worth as on March 31 of the previous year. Within this overall ceiling, the
aggregate direct exposure by way of the consolidated bank’s investment in
shares, convertible bonds / debentures, units of equity-oriented mutual funds
and all exposures to Venture Capital Funds (VCFs) [both registered and
unregistered] should not exceed 20 per cent of its consolidated net worth.
Note For the purpose of application of prudential norms on a group-wise basis, a
‘consolidated bank' is defined as a group of entities, which include a licensed
bank, which may or may not have subsidiaries.
2.3.2.3 The above-mentioned ceilings (sub-paragraphs A and B) are the maximum
permissible and a bank’s Board of Directors is free to adopt a lower ceiling for
the bank, keeping in view its overall risk profile and corporate strategy. Banks
are required to adhere the ceilings on an ongoing basis.
2.3.3 Definition of Net Worth
Net worth would comprise of Paid-up capital plus Free Reserves including Share
Premium but excluding Revaluation Reserves, plus Investment Fluctuation Reserve
and credit balance in Profit & Loss account, less debit balance in Profit and
Loss account, Accumulated Losses and Intangible Assets. No general or specific
provisions should be included in computation of net worth. Infusion of capital
through equity shares, either through domestic issues or overseas floats after
the published balance sheet date, may also be taken into account for determining
the ceiling on exposure to capital market. Banks should obtain an external
auditor’s certificate on completion of the augmentation of capital and submit
the same to the Reserve Bank of India (Department of Banking Supervision) before
reckoning the additions, as stated above.
2.3.4 Items excluded from Capital Market Exposure
The following items would be excluded from the aggregate exposure ceiling of 40
per cent of net worth and direct investment exposure ceiling of 20 per cent of
net worth (wherever applicable) :
- Banks’ investments in own subsidiaries, joint ventures, sponsored Regional
Rural Banks (RRBs) and investments in shares and convertible debentures,
convertible bonds issued by institutions forming crucial financial
infrastructure such as National Securities Depository Ltd. (NSDL), Central
Depository Services (India) Ltd. (CDSL), National Securities Clearing
Corporation Ltd. (NSCCL), National Stock Exchange (NSE), Clearing Corporation of
India Ltd., (CCIL), Credit Information Bureau of India Ltd. (CIBIL) and other
approved credit information companies, Multi Commodity Exchange Ltd. (MCX),
National Commodity and Derivatives Exchange Ltd. (NCDEX), National
Multi-Commodity Exchange of India Ltd. (NMCEIL), National Collateral Management
Services Ltd. (NCMSL) and other All India Financial Institutions as given in
Annex 3. After listing, the exposures in excess of the original investment (i.e.
prior to listing) would form part of the Capital Market Exposure.
- Tier I and Tier II debt instruments issued by other banks;
- Investment in Certificate of Deposits (CDs) of other banks;
- Preference Shares;
- Non-convertible debentures and non-convertible bonds;
- Units of Mutual Funds under schemes where the corpus is invested exclusively
in debt instruments;
- Shares acquired by banks as a result of conversion of debt/overdue interest
into equity under Corporate Debt Restructuring (CDR) mechanism;
- Term loans sanctioned to Indian promoters for acquisition of equity in
overseas joint ventures / wholly owned subsidiaries under the refinance scheme
of Export Import Bank of India (EXIM Bank).
- With effect from April 16, 2008, banks may exclude their own underwriting
commitments, as also the underwriting commitments of their subsidiaries, through
the book running process, for the purpose of arriving at the capital market
exposure of the solo bank as well as the consolidated bank. (However, the
position in this regard would be reviewed at a future date).
- Promoters’ shares in the SPV of an infrastructure project pledged to the
lending bank for infrastructure project lending.
2.3.5 Computation of exposure
For computing the exposure to the capital markets, loans/advances sanctioned and
guarantees issued for capital market operations would be reckoned with reference
to sanctioned limits or outstanding, whichever is higher. However, in the case
of fully drawn term loans, where there is no scope for re-drawal of any portion
of the sanctioned limit, banks may reckon the outstanding as the exposure.
Further, banks’ direct investment in shares, convertible bonds, convertible
debentures and units of equity-oriented mutual funds would be calculated at
their cost price.
2.3.6 Intra-day Exposures
At present, there are no explicit guidelines for monitoring banks’ intra-day
exposure to the capital markets, which are inherently risky. It has been decided
that the Board of each bank should evolve a policy for fixing intra-day limits
and put in place an appropriate system to monitor such limits, on an ongoing
basis. The position will be reviewed at a future date.
2.3.7 Enhancement in limits
Banks having sound internal controls and robust risk management systems can
approach the Reserve Bank for higher limits together with details thereof.
2.4 Financing of equities and investments in shares
2.4.1 Advances against shares to individuals
Loans against security of shares, convertible bonds, convertible debentures and
units of equity oriented mutual funds to individuals from the banking system
should not exceed the limit of Rs.10 lakh per individual if the securities are
held in physical form and Rs. 20 lakhs per individual if the securities are held
in demat form. Such loans are meant for genuine individual investors and banks
should not support collusive action by a large group of individuals belonging to
the same corporate or their inter-connected entities to take multiple loans in
order to support particular scrips or stock-broking activities of the concerned
firms. Such finance should be reckoned as an exposure to capital market. Banks
should formulate, with the approval of their Board of Directors, a Loan Policy
for granting advances to individuals against shares, debentures, and bonds
keeping in view the RBI guidelines. As a prudential measure, banks may also
consider laying down appropriate aggregate sub-limits of such advances.
2.4.2 Financing of Initial Public Offerings (IPOs)
Banks may grant advances to individuals for subscribing to IPOs. Loans/advances
to any individual from the banking system against security of shares,
convertible bonds, convertible debentures, units of equity oriented mutual funds
and PSU bonds should not exceed the limit of Rs.10 lakh for subscribing to IPOs.
The corporates should not be extended credit by banks for investment in other
companies’ IPOs. Similarly, banks should not provide finance to NBFCs for
further lending to individuals for IPOs. Finance extended by a bank for IPOs
should be reckoned as an exposure to capital market.
2.4.3
Bank finance to assist employees to buy shares of their own companies
2.4.3.1 Banks may extend finance to employees for purchasing shares of their own
companies under Employees Stock Option Plan(ESOP)/ reserved by way of employees'
quota under IPO to the extent of 90% of the purchase price of the shares or
Rs.20 lakh, whichever is lower. Finance extended by banks for ESOPs/ employees'
quota under IPO would be treated as an exposure to capital market within the
overall ceiling of 40 per cent of their net worth. These instructions will not
be applicable for extending financial assistance by banks to their own employees
for acquisition of shares under ESOPs/ IPOs, as banks are not allowed toextend
advances including advances to their employees / Employees' Trusts set up by
them for the purpose of purchasing their own banks' shares under ESOPs / IPOs or
from the secondary market. This prohibition will apply irrespective of whether
the advances are secured or unsecured.
2.4.3.2 Banks should obtain a declaration from the borrower indicating the
details of the loans / advances availed against shares and other securities
specified above, from any other bank/s in order to ensure compliance with the
ceilings prescribed for the purpose.
2.4.3.3 Follow-on Public Offers(FPOs) will also be included under IPO.
2.4.4
Advances against shares to Stock Brokers & Market Makers
2.4.4.1 Banks are free to provide credit facilities to stockbrokers and market
makers on the basis of their commercial judgment, within the policy framework
approved by their Boards. However, in order to avoid any nexus emerging between
inter-connected stock broking entities and banks, the Board of each bank should
fix, within the overall ceiling of 40 percent of their net worth as on March 31
of the previous year, a sub-ceiling for total advances to –
- all the stockbrokers and market makers (both fund based and non-fund based,
i.e. guarantees); and
- to any single stock broking entity, including its associates/
inter-connected companies.
2.4.4.2 Further, banks should not extend credit facilities directly or
indirectly to stockbrokers for arbitrage operations in Stock Exchanges.
2.4.5
Bank financing to individuals against shares to joint holders or third
party beneficiaries
While granting advances against shares held in joint names to joint holders or
third party beneficiaries, banks should be circumspect and ensure that the
objective of the regulation is not defeated by granting advances to other joint
holders or third party beneficiaries to circumvent the above limits placed on
loans/advances against shares and other securities specified above.
2.4.6 Advances against units of mutual funds
While granting advances against units of mutual funds, the banks should adhere
to the following guidelines:
- The units should be listed in the stock exchanges or repurchase facility for
the units should be available at the time of lending.
- The units should have completed the minimum lock-in-period stipulated in the
relevant scheme.
- The amount of advances should be linked to the Net Asset Value (NAV) /
repurchase priceor the market value, whichever is less and not to the face value
of the units.
- Advances against units of mutual funds (except units of exclusively debt
oriented mutual funds) would attract the quantum and margin requirements as are
applicable to advances against shares and debentures. However, the quantum and
margin requirement for loans/ advances to individuals against units of
exclusively debt-oriented mutual funds may be decided by individual banks
themselves in accordance with their loan policy.
- The advances should be purpose oriented taking into account the credit
requirement of the investor. Advances should not be granted for subscribing to
or boosting up the sales of another scheme of a mutual fund or for the purchase
of shares/ debentures/ bonds etc.
2.4.7
Advances to other borrowers against shares/debentures/bonds
2.4.7.1 The question of granting advances against primary security of shares and
debentures including promoters’ shares to industrial, corporate or other
borrowers should not normally arise. However, such securities can be accepted as
collateral for secured loans granted as working capital or for other productive
purposes from borrowers other than NBFCs. In such cases, banks should accept
shares only in dematerialised form. Banks may accept shares of promoters only in
dematerialised form wherever demat facility is available.
2.4.7.2 In the course of setting up of new projects or expansion of existing
business or for the purpose of raising additional working capital required by
units other than NBFCs, there may be situations where such borrowers may not
able to find the required funds towards margin, in anticipation of mobilising of
long-term resources. In such cases, there would be no objection to the banks’
obtaining collateral security of shares and debentures by way of margin. Such
arrangements would be of a temporary nature and may not be continued beyond a
period of one year. Banks have to satisfy themselves regarding the capacity of
the borrower to raise the required funds and to repay the advance within the
stipulated period.
2.4.8 Bank Loans for Financing Promoters' Contributions
2.4.8.1 Loans sanctioned to corporates against the security of shares (as far as
possible, demat shares) for meeting promoters' contribution to the equity of new
companies in anticipation of raising resources, should be treated as a bank’s
investments in shares which would thus come under the ceiling of 40 percent of
the bank's net worth as on March 31 of the previous year prescribed for the
bank’s total exposure including both fund based and non-fund based to capital
market in all forms.
2.4.8.2 These loans will also be subject to individual/group of borrowers
exposure norms as well as the statutory limit on shareholding in companies, as
detailed above.
2.4.9 Bridge Loans
2.4.9.1 Banks have been permitted to sanction bridge loans to companies for a
period not exceeding one year against expected equity flows/issues. Such loans
should be included within the ceiling of 40 percent of the banks’ net worth as
on March 31 of the previous year prescribed for total exposure, including both
fund-based and non-fund based exposure to capital market in all forms.
2.4.9.2 Banks should formulate their own internal guidelines with the approval
of their Board of Directors for grant of such loans, exercising due caution and
attention to security for such loans.
2.4.9.3 Banks may also extend bridge loans against the expected proceeds of
Non-Convertible Debentures, External Commercial Borrowings, Global Depository
Receipts and/or funds in the nature of Foreign Direct Investments, provided the
banks are satisfied that the borrowing company has already made firm
arrangements for raising the aforesaid resources/funds.
2.4.10 Investments in Venture Capital Funds (VCFs)
As announced in the Annual Policy Statement for the year 2006-2007 and advised
in our circulars DBOD.BP.BC.84 & 27/21.01.002/2005-2006 dated May 25 and August
23, 2006 respectively, banks’ exposures to VCFs (both registered and
unregistered) will be deemed to be on par with equity and hence will be reckoned
for compliance with the capital market exposure ceilings (both direct and
indirect).
2.4.11
Margins on advances against shares/ issue of guarantees
A uniform margin of 50 per cent shall be applied on all advances / financing of
IPOs / issue of guarantees on behalf of stockbrokers and market makers. A
minimum cash margin of 25 per cent (within the margin of 50%) shall be
maintained in respect of guarantees issued by banks for capital market
operations. These margin requirements will also be applicable in respect of bank
finance to stock brokers by way of temporary overdrafts for DVP transactions.
2.4.12 Disinvestment Programme of the Government of India
Iin the context of the Government of India’s programme of disinvestments of its
holdings in some public sector undertakings (PSUs), banks can extend finance to
the successful bidders for acquisition of shares of these PSUs. If on account of
banks’ financing acquisition of PSU shares under the Government of India’s
disinvestment programmes, any bank is likely to exceed the regulatory ceiling of
40 per cent of its net worth as on March 31 of the previous year, such requests
for relaxation of the ceiling would be considered by RBI on a case by case
basis, subject to adequate safeguards regarding margin, bank’s overall exposure
to capital market, internal control and risk management systems, etc. The
relaxation would be considered in such a manner that the bank’s exposure to
capital market in all forms, net of its advances for financing of acquisition of
PSU shares, shall be within the regulatory ceiling of 40 per cent. RBI would
also consider relaxation on specific requests from banks in the individual /
group credit exposure norms on a case by case basis, provided that the bank’s
total exposure to the borrower, net of its exposure due to acquisition of PSU
shares under the Government of India disinvestments programme, should be within
the prudential individual/ group borrower exposure ceiling prescribed by RBI.
2.4.13.
a. Financing for Acquisition of Equity in Overseas Companies
Banks may extend financial assistance to Indian companies for acquisition of
equity in overseas joint ventures / wholly owned subsidiaries or in other
overseas companies, new or existing, as strategic investment, in terms of a
Board approved policy, duly incorporated in the loan policy of the banks. Such
policy should include overall limit on such financing, terms and conditions of
eligibility of borrowers, security, margin, etc. While the Board may frame its
own guidelines and safeguards for such lending, such acquisition(s) should be
beneficial to the company and the country. The finance would be subject to
compliance with the statutory requirements under Section 19(2) of the Banking
Regulation Act, 1949.
b. Refinance Scheme of Export Import Bank of India
Under the refinance scheme of Export Import Bank of India (EXIM Bank), the banks
may sanction term loans on merits to eligible Indian promoters for acquisition
of equity in overseas joint ventures / wholly owned subsidiaries, provided that
the term loans have been approved by the EXIM Bank for refinance.
2.4.14 Arbitrage Operations
Banks should not undertake arbitrage operations themselves or extend credit
facilities directly or indirectly to stockbrokers for arbitrage operations in
Stock Exchanges. While banks are permitted to acquire shares from the secondary
market, they should ensure that no sale transaction is undertaken without
actually holding the shares in their investment accounts.
2.4.15 Margin Trading
2.4.15.1 Banks may extend finance to stockbrokers for margin trading. The Board
of each bank should formulate detailed guidelines for lending for margin
trading, subject to the following parameters:
- The finance extended for margin trading should be within the overall ceiling
of 40% of net worth prescribed for exposure to capital market.
- A minimum margin of 50 per cent should be maintained on the funds lent for
margin trading.
- The shares purchased with margin trading should be in dematerialised mode
under pledge to the lending bank. The bank should put in place an appropriate
system for monitoring and maintaining the margin of 50% on an ongoing basis.
- The bank’s Board should prescribe necessary safeguards to ensure that no
';nexus'; develops between inter-connected stock broking entities/ stockbrokers
and the bank in respect of margin trading. Margin trading should be spread out
by the bank among a reasonable number of stockbrokers and stock broking
entities.
2.4.15.2 The Audit Committee of the Board should monitor periodically the bank’s
exposure by way of financing for margin trading and ensure that the guidelines
formulated by the bank’s Board, subject to the above parameters, are complied
with. Banks should disclose the total finance extended for margin trading in the
';Notes on Account'; to their Balance Sheet.
2.5. Risk Management and Internal Control System
Banks desirous of making investment in equity shares/ debentures, financing of
equities and issue of guarantees etc., within the above ceiling, should observe
the following guidelines:
2.5.1 Investment Policy
- The banks should formulate transparent policy and procedure for investment
in shares etc., with the approval of their Board.
- The banks should build up adequate expertise in equity research by
establishing a dedicated equity research department, wherever warranted by their
scale of operations.
2.5.2 Investment Committee
The decision in regard to direct investment should be taken by an Investment
Committee set up by the bank’s Board. The Investment Committee should be held
accountable for all investments made by the bank.
2.5.3 Risk Management
- Banks should ensure that their exposure to stockbrokers is well diversified
in terms of number of broker clients, individual inter-connected broking
entities.
- While sanctioning advances to stockbrokers, the banks should take into
account the track record and credit worthiness of the broker, financial position
of the broker, operations on his own account and on behalf of clients, average
turnover period of stocks and shares, the extent to which broker’s funds are
required to be involved in his business operations, etc.
- While processing proposals for loans to stockbrokers, banks should obtain
details of facilities enjoyed by the broker and all his connected companies from
other banks.
- While granting advances against shares and debentures to other borrowers,
banks should obtain details of credit facilities availed by them or their
associates / inter-connected companies from other banks for the same purpose
(i.e. investment in shares etc.) in order to ensure that high leverage is not
built up by the borrower or his associate or inter-connected companies with bank
finance.
2.5.4 Audit Committee
- The surveillance and monitoring of investment in shares / advances against
shares shall be done by the Audit Committee of the Board, which shall review in
each of its meetings, the total exposure of the bank to capital market both fund
based and non-fund based, in different forms and ensure that the guidelines
issued by RBI are complied with and adequate risk management and internal
control systems are in place;
- The Audit Committee shall keep the Board informed about the overall
exposure to capital market, the compliance with the RBI and Board guidelines,
adequacy of risk management and internal control systems;
- In order to avoid any possible conflicts of interest, it should be ensured
that the stockbrokers as directors on the Boards of banks or in any other
capacity, do not involve themselves in any manner with the Investment Committee
or in the decisions in regard to making investments in shares, etc., or advances
against shares.
2.6 Valuation and Disclosure
Equity shares in a bank’s portfolio - as primary security or as collateral for
advances or for issue of guarantees and as an investment - should be marked to
market preferably on a daily basis, but at least on weekly basis. Banks should
disclose the total investments made in equity shares, convertible bonds and
debentures and units of equity oriented mutual funds as also aggregate advances
against shares in the “Notes on Account” to their balance sheets.
2.7
Cross holding of capital among banks / financial institutions
2.7.1 (i) Banks' / FIs' investment in the following instruments, which are
issued by other banks / FIs and are eligible for capital status for the investee
bank / FI, should not exceed 10 percent of the investing bank's capital funds
(Tier I plus Tier II):
b. Preference shares eligible for capital status;
c. Subordinated debt instruments;
d. Hybrid debt capital instruments; and
e. Any other instrument approved as in the nature of capital.
- Banks / FIs should not acquire any fresh stake in a bank's equity shares,
if by such acquisition, the investing bank's / FI's holding exceeds 5 percent of
the investee bank's equity capital.
- It is clarified that a bank’s/FI’s equity holdings in another bank held
under provisions of a Statute will be outside the purview of the ceiling
prescribed above.
2.7.2 Banks’ / FIs’ investments in the equity capital of subsidiaries are at
present deducted from their Tier I capital for capital adequacy purposes.
Investments in the instruments issued by banks / FIs which are listed at
paragraph 2.7.1(i) above, which are not deducted from Tier I capital of the
investing bank/ FI, will attract 100 percent risk weight for credit risk for
capital adequacy purposes.
2.8 Margin Requirements
A. Banks' Exposure to Commodity Markets
In terms of extant instructions, banks may issue guarantees on behalf of share
and stock brokers in favour of stock exchanges in lieu of margin requirements as
per stock exchange regulations. While issuing such guarantees banks should
obtain a minimum margin of 50 percent. A minimum cash margin of 25 percent
(within the above margin of 50 percent) should be maintained in respect of such
guarantees issued by banks. The above minimum margin of 50 percent and minimum
cash margin requirement of 25 percent (within the margin of 50 percent) will
also apply to guarantees issued by banks on behalf of commodity brokers in
favour of the national level commodity exchanges, viz., National Commodity &
Derivatives Exchange (NCDEX), Multi Commodity Exchange of India Limited (MCX)
and National Multi-Commodity Exchange of India Limited (NMCEIL), in lieu of
margin requirements as per the commodity exchange regulations.
B.
Banks’ exposure in respect of Currency Derivatives segment
The provisions with respect to capital market exposure including the related
provisions with regard to maintenance of 50% margin as well as intra-day
monitoring are not applicable to banks’ exposure to brokers under the currency
derivatives segment.
2.9
Limits on exposure to unsecured guarantees and unsecured advances
2.9.1 The instruction that banks have to limit their commitment by way of
unsecured guarantees in such a manner that 20 percent of the bank’s outstanding
unsecured guarantees plus the total of outstanding unsecured advances do not
exceed 15 percent of total outstanding advances has been withdrawn to enable
banks’ Boards to formulate their own policies on unsecured exposures.
Simultaneously, all exemptions allowed for computation of unsecured exposures
also stand withdrawn.
2.9.2 With a view to ensuring uniformity in approach and implementation,
‘unsecured exposure’ is defined as an exposure where the realisable value of the
security, as assessed by the bank /approved valuers / Reserve Bank’s inspecting
officers, is not more than 10 percent, ab-initio, of the outstanding exposure.
‘Exposure’ shall include all funded and non-funded exposures (including
underwriting and similar commitments). ‘Security’ will mean tangible security
properly charged to the bank and will not include intangible securities like
guarantees, comfort letters, etc.
2.9.3. For determining the amount of unsecured advances for reflecting in
schedule 9 of the published balance sheet, the rights, licenses, authorisations,
etc., charged to the banks as collateral in respect of projects (including
infrastructure projects) financed by them, should not be reckoned as tangible
security. Banks, may however, treat annuities under build-operate –transfer
(BOT) model in respect of road/highway projects and toll collection rights where
there are provisions to compensate the project sponsor if a certain level of
traffic is not achieved, as tangible securities, subject to the condition that
banks’ right to receive annuities and toll collection rights is legally
enforceable and irrevocable.
2.10
'Safety Net' Schemes for Public Issues of Shares, Debentures, etc.
2.10.1 'Safety Net' Schemes
Reserve Bank had observed that some banks/their subsidiaries were providing
buy-back facilities under the name of ‘Safety Net’ Schemes in respect of certain
public issues as part of their merchant banking activities. Under such schemes,
large exposures are assumed by way of commitments to buy the relative securities
from the original investors at any time during a stipulated period at a price
determined at the time of issue, irrespective of the prevailing market price. In
some cases, such schemes were offered suo motto without any request from the
company whose issues are supported under the schemes. Apparently, there was no
undertaking in such cases from the issuers to buy the securities. There is also
no income commensurate with the risk of loss built into these schemes, as the
investor will take recourse to the facilities offered under the schemes only
when the market value of the securities falls below the pre-determined price.
Banks/their subsidiaries have therefore been advised that they should refrain
from offering such ‘Safety Net’ facilities by whatever name called.
2.10.2 Provision of buy back facilities
In some cases, the issuers provide buy-back facilities to original investors up
to Rs. 40,000/- in respect of non-convertible debentures after a lock-in-period
of one year, to provide liquidity to debentures issued by them. If, at the
request of the issuers, the banks or their subsidiaries find it necessary to
provide additional facilities to small investors subscribing to new issues, such
buy-back arrangements should not entail commitments to buy the securities at
pre-determined prices. Prices should be determined from time to time, keeping in
view the prevailing stock market prices for the securities. Commitments should
also be limited to a moderate proportion of the total issue in terms of the
amount and should not exceed 20 percent of the owned funds of the banks/their
subsidiaries. These commitments will also be subject to the overall exposure
limits which have been or may be prescribed from time to time.
ANNEX 1
The definition of infrastructure lending and the list of the items
included under infrastructure sector
[paragraph 2.1.1.2]
Any credit facility in whatever form extended by lenders (i.e. banks, FIs or
NBFCs) to an infrastructure facility as specified below falls within the
definition of ';infrastructure lending';. In other words, a credit facility
provided to a borrower company engaged in:
- developing or
- operating and maintaining, or
- developing, operating and maintaining any infrastructure facility that is a
project in any of the following sectors, or any infrastructure facility of a
similar nature :
- a road, including toll road, a bridge or a rail system;
- a highway project including other activities being an integral part of the
highway project;
- a port, airport, inland waterway or inland port;
- a water supply project, irrigation project, water treatment system,
sanitation and sewerage system or solid waste management system;
- telecommunication services whether basic or cellular, including radio paging,
domestic satellite service (i.e., a satellite owned and operated by an Indian
company for providing telecommunication service), Telecom Towers network of trunking, broadband network and internet services;
- an industrial park or special economic zone ;
- generation or generation and distribution of power including power projects
based on all the renewable energy sources such as wind, biomass, small hydro,
solar, etc.
- transmission or distribution of power by laying a network of new
transmission or distribution lines.
- construction relating to projects involving agro-processing and supply of
inputs to agriculture;
- construction for preservation and storage of processed agro-products,
perishable goods such as fruits, vegetables and flowers including testing
facilities for quality;
- construction of educational institutions and hospitals.
- laying down and / or maintenance of pipelines for gas, crude oil,
petroleum, minerals including city gas distribution networks.
- any other infrastructure facility of similar nature.
ANNEX 2
List of All-India Financial Institutions
(Counter party exposure - List of institutions guaranteeing bonds of corporates)
[paragraphs 2.1.3.4(c)]
- Industrial Finance Corporation of India Ltd.
- Industrial Investment Bank of India Ltd.
- Tourism Finance Corporation of India Ltd.
- Risk Capital and Technology Finance Corporation Ltd.
- Technology Development and Information Company of India Ltd.
- Power Finance Corporation Ltd.
- National Housing Bank
- Small Industries Development Bank of India
- Rural Electrification Corporation Ltd.
- Indian Railways Finance Corporation Ltd.
- National Bank for Agriculture and Rural Development
- Export Import Bank of India
- Infrastructure Development Finance Company Ltd.
- Housing and Urban Development Corporation Ltd.
- Indian Renewable Energy Development Agency Ltd.
ANNEX 3
List of All-India Financial Institutions
[Investment in equity/convertible bonds/ convertible debentures by banks -
List of FIs whose instruments are exempted from Capital Market Exposure ceiling]
[paragraph 2.3.4.(i)]
- Industrial Finance Corporation of India Ltd. (IFCI)
- Tourism Finance Corporation of India Ltd. (TFCI)
- Risk Capital and Technology Finance Corporation Ltd. (RCTC)
- Technology Development and Information Company of India Ltd. (TDICI)
- National Housing Bank (NHB)
- Small Industries Development Bank of India (SIDBI)
- National Bank for Agriculture and Rural Development (NABARD)
- Export Import Bank of India (EXIM Bank)
- Industrial Investment Bank of India (IIBI)
- Life Insurance Corporation of India (LIC)
- General Insurance Corporation of India (GIC)
ANNEX 4
List of circulars consolidated by the
Master Circular on 'Exposure Norms
| 1 |
DBOD.No.Dir.BC |
15/13.03.00/2009-10 |
01.07.2009 |
| 2 |
DBOD.NO.BP.BC. |
125/21.04.048/2008-09 |
17.04.2009 |
| 3 |
DBOD.NO.BP.BC |
74/21.04.172/2009-10 |
12.02.2010 |
| 4 |
DBOD.No.BP.BC |
96/08.12.014/2009-10 |
23.04.2010 |
| 5 |
Mail Box Clarification |
09.11.2009 |
|
| 6 |
Mail Box Clarification |
09.04.2010 |
|