What changed
RBI directed that existing guidelines on consortium and multiple banking arrangements, previously applicable only to banks, now apply equally to select all-India Financial Institutions (AIFIs). These AIFIs must follow the same information-sharing rules among themselves and with banks.
What it means for you
Banks and AIFIs must now coordinate more closely on large exposures, reducing information asymmetry and potential credit risk. This levels the playing field for lenders in consortium deals and strengthens overall credit monitoring.
What you must do
- Ensure your bank's consortium and multiple banking policies align with the extended guidelines for AIFIs.
- Update information-sharing protocols with Exim Bank, NABARD, NHB, and SIDBI to comply with the circular.
- Review existing consortium arrangements to confirm all participating AIFIs are adhering to the same norms.
Who it affects
All scheduled commercial banks, Exim Bank, NABARD, NHB, SIDBI
Which AIFIs are covered under this circular?
The circular applies to Exim Bank, NABARD, NHB, and SIDBI.
What is the effective date of these guidelines?
The circular was issued on August 5, 2009, and applies from that date.
Do these guidelines change existing consortium norms for banks?
No, the same norms that already apply to banks are now extended to AIFIs; banks' obligations remain unchanged.