RBI Proposal - Framework to mitigate risk of lending
- Incremental exposure of the banking system to a borrower beyond permissible lending limit will be deemed to carry higher risk.
- Plans to put in place prudential risk recognition measures.
- 3% standard asset provision on the banking system's incremental exposure.
- Additional risk weight of 75% over and above the applicable risk weight for exposure to borrower.
- Banks may subscribe to bonds issued by borrowers (over and above the permissible lending limit) in the first year of the framework.
- RBI to allow banks specific exemptions to charge differentiated interest rate to specified borrowers.