The Reserve Bank of India on Thursday issued clarifications on the prudential treatment of exposures of foreign bank branches operating in India to their group entities, while announcing changes to the Large Exposures Framework (LEF) and intra-group transaction rules. | Photo credit: DANISH SIDDIQUI/Reuters
The changes to the Large Exposures Framework (LEF) and Intra-group transactions and exposures also suggest certain methodological aspects regarding the calculation of LEF and Intra-group transactions and exposures (ITE).
It further states that banks should implement policies on concentration risk management of their exposures to a single counterparty, groups of interconnected counterparties and specific sectors of the economy, as well as systems to monitor and address the risks arising to them from their exposures to ultra-large borrowers.
“While banks may have their own criteria while deciding on an ultra-large borrower, they will, among other things, take into account the aggregate borrowings of such entities from the banking system for credit assessment of such borrowers,” the amended guidelines said.
In addition, the central bank has made changes to several other regulations.
The Reserve Bank of India (Commercial Banks – Credit Facilities) Amendment Directions, 2025 has been formulated to ensure a streamlined and harmonized set of regulations for both domestic and exporting jewelers for greater ease of doing business and also to develop a supervisory management information system for gold metal loans.
The central bank has also issued ten amendment instructions to amend the existing instructions regarding credit information reporting process for various regulated entities including banks and NBFCs.
According to RBI, the objective of the ten amendment guidelines is to ensure more frequent, accurate and timely reporting of credit information by credit institutions (CIs) to credit information companies (CICs), thereby improving the quality and recency of CIRs used in underwriting and monitoring of credit.
Existing guidelines require credit information to be submitted by CBs to CICs at biweekly or shorter intervals.
Given the increasing reliance on credit information reports (CIRs) in credit underwriting processes, it is imperative that the CIRs provided by CICs reflect more recent information.
Published on December 4, 2025
#RBI #updates #foreign #bank #exposure #norms #LEF #rules #credit #reporting #framework