What changed
RBI replaced the July 2011 master circular with a new version incorporating all instructions issued up to June 30, 2012. The circular consolidates existing guidelines on credit exposure limits for individual/group borrowers, industry/sector exposures, and capital market exposure without introducing new policy changes.
What it means for you
Banks now have a single reference document for all exposure norms, reducing ambiguity and ensuring compliance with the latest RBI directives. The circular reinforces existing ceilings and exemptions, requiring banks to review their internal policies and reporting systems to match the consolidated framework.
What you must do
- Update internal credit policy manuals to reference the July 2012 master circular as the governing document.
- Verify that current exposure levels for individual/group borrowers and capital markets are within the prescribed ceilings.
- Ensure risk management and audit committees review the updated norms and adjust monitoring processes accordingly.
- Train credit and compliance teams on the consolidated exposure limits and exemptions.
Who it affects
All scheduled commercial banks (excluding RRBs), Credit risk management teams, Compliance and audit departments, Board-level investment and risk committees
Does this master circular introduce new exposure limits?
No, it consolidates existing instructions issued up to June 30, 2012, without changing the substantive limits or exemptions.
Which banks are covered under this circular?
All scheduled commercial banks are covered, except Regional Rural Banks (RRBs).
What should banks do if their current exposures exceed the prescribed limits?
Banks must immediately review and bring exposures within the ceilings specified in the circular, and report any deviations to RBI as per existing guidelines.