What changed
This is an updated Master Circular that consolidates all exposure-related instructions issued up to June 30, 2010, replacing the previous version dated July 1, 2009. It does not introduce new regulations but serves as a single reference document for banks.
What it means for you
Banks must now refer to this circular for all exposure norms, including ceilings on credit to individual/group borrowers, sectoral limits, and capital market exposure. Compliance with these consolidated rules is mandatory. The circular ensures uniformity and clarity in regulatory expectations.
What you must do
- Replace the previous 2009 Master Circular with this updated version for all exposure norm compliance.
- Review internal policies to ensure alignment with the consolidated guidelines on credit and capital market exposure.
- Train credit and risk teams on the updated circular, especially sections on group borrower definitions and capital market exposure limits.
- Update internal audit checklists to reference this circular for exposure norm audits.
Who it affects
All scheduled commercial banks (excluding Regional Rural Banks), Credit risk management teams, Compliance departments, Internal audit functions
Does this circular introduce any new exposure limits?
No, it consolidates existing instructions issued up to June 30, 2010, without introducing new limits.
Which banks are exempt from this circular?
Regional Rural Banks (RRBs) are excluded from the application of this Master Circular.
Where can I find the full list of consolidated circulars?
Annex 4 of the Master Circular lists all previous circulars that have been consolidated.