Oil Companies Get Higher Single-Borrower Exposure Cap
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2007-08/338 · issued 29 May 2008 · ~1 min read
Quick answerRBI raised the single-borrower exposure limit for oil companies holding government-issued Oil Bonds (non-SLR) from 15% to 25% of capital funds, with an additional 5% possible in exceptional cases. This is effective immediately.
The rule, in the simplest words
The usual rule says a bank can lend up to 15% of its own money (capital funds) to one borrower.
For oil companies that got special government bonds (Oil Bonds that can't be used as government securities), the limit is raised to 25%.
Banks can lend an extra 5% (total 30%) in special cases, but only if they follow the old rules.
This change only helps oil companies with those specific bonds; other borrowers still have the 15% limit.
All other lending rules stay the same.
How it plays out — a real example
Ravi, a credit officer at a public sector bank, reviews a loan request from an oil company that holds government-issued Oil Bonds. He updates the exposure limit from 15% to 25% of the bank's capital funds, allowing the loan to proceed without needing special approval.
What changed
The standard single-borrower exposure limit of 15% of capital funds was increased to 25% specifically for oil companies that have been issued Oil Bonds (non-SLR) by the Government of India. Banks can also extend an extra 5% in exceptional circumstances, as previously allowed under the Master Circular.
What it means for you
Banks can now lend more to oil companies that hold government Oil Bonds without breaching exposure norms. This provides relief to oil sector financing, especially for working capital or project needs, while keeping other exposure rules unchanged. Lenders must ensure the bonds are non-SLR and verify the company's eligibility.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Update internal exposure limits for oil companies with government-issued Oil Bonds (non-SLR) to 25% of capital funds.
Document exceptional cases for the additional 5% exposure as per Master Circular guidelines.
Verify that the oil company holds valid Oil Bonds without SLR status before applying the higher limit.
Ensure all other exposure norms from the Master Circular remain in force.
Who it affects
Scheduled commercial banks (excluding RRBs), Oil companies with government-issued Oil Bonds (non-SLR), Credit risk and compliance teams
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-07-29 04:02 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn05 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Does this apply to all oil companies?
No, only to oil companies that have been issued Oil Bonds (which do not have SLR status) by the Government of India.
Can we exceed 25% for any oil company?
Yes, in exceptional circumstances, banks may increase exposure by an additional 5% of capital funds, as per the existing Master Circular provisions.
Are other exposure norms affected?
No, all other instructions in the Master Circular on Exposure Norms remain unchanged.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-08/338 · issued 29 May 2008. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4199&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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