SBI exceeds the exposure limit on RIL loans by Rs. 500 crore
By Vaibhav Aggarwal
Jun 12, 2012
Print    Email    RSS   

The state own lender, State Bank of India has said that it exceeded the credit exposure limit set by the RBI on the loans to Reliance Industries Limited (RIL). This is for the fourth time that SBI has breached the norm in 4 years.

As per the norms of RBI, a lender cannot give more than 15% of its total loans to a single borrower, but can exceed this limit with prior board approval. SBI breached the norm on its loans to RIL, Indian Oil Corporation (IOC) and Bharat Heavy Electricals Limited (BHEL).

The lender however brought down the exposure limits to within normal by the end of the fiscal, but during certain periods of time, the exposure exceeded Rs. 500 crore for RIL, Rs. 3000 crore for BHEL loans, and as much as Rs. 4000 crore for loans to IOC.

SBI had previously exceeded the exposure limit in 2008-09 for RIL, and IOC; in 2009-10 the bank again exceededthe credit exposure limit for RIL, IOC, BHEL, Tata Group; 2010-11 also saw the bank exceeding the credit exposure for IOC, BHEL, and RIL.

RBI guidelines have capped a bank's exposure for a single borrower at 15%, a 5% relaxation for infrastructure projects and up to 40% for a borrower group, and additional 10% for infrastructure projects.

In January 2012, the bank exceeded the credit exposure limit of Rs. 14,779.58 crore and stood at Rs. 15,214.49 crore, while in February 2012, the sanction limit of Rs. 15,358.18 crore again exceeded the Rs. 14,783.26 crore ceiling.

Similarly the bank exceeded the limits on IOC, and BHEL loans on more than one occasions.


(Comments Posted : 0) Post Your Comments
Show All Comments
 Select a product:

 Select a product:

Carnival of Indian Personal Finance Blogs #2
Pay income tax through ATM
Carnival of Indian Personal Finance Blogs #3
An Insight into Lending Rate Changes
A chronicle of excesses by loan recovery...

HOTEL: CaℒL Giℛℒs In Kharar 09855660911...
Model Escoℛts Service In Pune 8888IOO484 Caℓℓ...
What is the outstanding Amount for my personal loan

LVB bank joined hands with NCML Feb 18, 2015
Syndicate Bank hiring 5000 new staff Feb 12, 2015
SBI donated Rs 8.6 cr as a part of CSR activity Feb 11, 2015
Canara Bank tied up with NHBC Feb 9, 2015
Hiring for Probationary clerks in South Indian Bank Feb 5, 2015
News Archive