A recent press report said that State Bank of India, exceeding RBI’s limit on exposure to single borrower has sanctioned loans to corporates such as RIL, IOC, Tatas and HDFC in the past three financial years.
Reports also said that Bank of India also has gone past the Reserve Bank’s limit in the last two fiscals and has sanctioned Rs. 2,819 crore to HDFC, over the prescribed limit of Rs 2,730 crore in 2009-10. It has also gives Rs. 405 crore above the limit to SIDBI.
Minister of State of Finance Mr. Namo Narain Meena said that SBI has gone inched past the limit to Reliance Industries and Indian Oil Corporation in all the years starting 2008-09; to BHEL in 2009-10 and 2010-11 and to the Tata Group in 2009-10.
Mr. Meena said that all the credit related matters of banks have been deregulated by the RBI and are governed by the bank’s own lending policies. He said that banks have to consider different loan proposals as per their commercial judgment and merits of each case keeping in mind the loan policies approved by the Board of Directors.
He added saying that SBI has informed that in exceptional circumstances RBI permitted banks to consider enhancement of the exposure to a borrower/group up to a further five per cent of capital funds with the approval of the Board.