Banks` exposure norms eased

Final guidelines remove Rs 10 lakh cap on loans for broking firms, corporates.

In a major relief for broking firms and corporates, the Reserve Bank of India has said that the ceiling on bank loans and advances against shares and debentures will apply to only “individuals” and not “single borrowers.” This means that there will not be any squeeze on bank advances to broking firms and corporates.

Any individual can now borrow from the banking system against security of such investments of up to Rs 10 lakh if the security is held in physical form and of up to Rs 20 lakh if it is in the demat form.

The central bank has kept the overall ceiling on a bank’s aggregate capital market exposure to 40 per cent of its networth.

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it is interesting how the Central aims to influence the stock market.
particularly the clause - "Any individual can now borrow from the banking system against security of such investments of up to Rs 10 lakh if the security is held in physical form and of up to Rs 20 lakh if it is in the demat form."

maybe knowledge bankets and stock market participants should be a wee be exposed to market forces!