Now, ICICI Bank breaches RBI norms for loans to RIL
Private sector lender ICICI Bank has emerged as the second major bank to have given loans to Mukesh Ambani-led Reliance Industries Ltd in excess of RBI norms in 2010-11.india Updated: Jun 12, 2011 21:18 IST
Private sector lender ICICI Bank has emerged as the second major bank to have given loans to Mukesh Ambani-led Reliance Industries Ltd in excess of RBI norms in 2010-11.
As per the Reserve Bank of India's prudential credit norms, a bank cannot give loans in excess of 15% of its capital funds to a single borrower, though banks can exceed this limit by 5% in exceptional cases with prior approval of their boards.
State Bank of India had said on Saturday that it had exceeded the norms. Both SBI and ICICI have said they have brought down their credit exposures within the limits as on March 31 2011, the last date of the financial year.
The borrowings from SBI and ICICI are estimated to account for nearly 10% of RIL's outstanding debt.
ICICI, in its annual report for 2010-11, has said, "The bank exceeded the single borrower limit of 15% of capital funds to Reliance Industries Limited."
The limit was exceeded with the board's prior approval, it also said. ICICI had exceeded the 15% limit for lending to RIL in 2009-10 as well.
RIL was the only borrower for which ICICI exceeded the RBI-prescribed limit. SBI breached this ceiling for three borrowers, RIL, BHEL and Indian Oil Corp, in 2010-11.
First Published: Jun 12, 2011 21:17 IST