While banks may define their own criteria for identifying an ultra-large borrower, they shall, among other factors, consider the overall indebtedness of such entities to the banking system when assessing credit risk, as per the Reserve Bank of India (Commercial Banks - Concentration Risk Management) Amendment Directions, 2025.
RBI asks Banks to have systems to monitor and address risks emanating from exposure to ultra
The Reserve Bank of India (RBI) on Thursday directed banks to have policies on concentration risk management of their exposures to a single counterparty, groups of interconnected counterparties, and specific sectors of the economy.
Banks must also establish systems to monitor and mitigate risks arising from exposures to ultra-large borrowers who are excessively leveraged and have substantial borrowings from the banking system.
While banks may define their own criteria for identifying an ultra-large borrower, they shall, among other factors, consider the overall indebtedness of such entities to the banking system when assessing credit risk, as per the Reserve Bank of India (Commercial Banks - Concentration Risk Management) Amendment Directions, 2025.
Published on December 4, 2025
