According to RBI it is necessary to build a repository of large credits and share it with banks so that the lenders are aware of building leverage and common exposures
The Reserve Bank of India (RBI) has decided to create a central repository on large borrowers, both individuals and entities, with an exposure of more than Rs10 crore to help banks deal with credit risks.
In a notification, the central bank said it is necessary to build a repository of large credits and share it with banks for enabling them to be aware of building leverage and common exposures.
“Accordingly, it has been decided to use the information supplied by the banks through the return on large borrowers (Form A)...which captures the system-wide exposure of individuals and entities having exposure (both fund and non-fund based) of more than Rs10 crore, for creation of a central repository of large credits across banks,” it said.
Raghuram Rajan, on taking over charge as governor of RBI, had said the central bank proposes to collect credit data and examine large common exposures across banks.
“This will enable the creation of a central repository on large credits, which we will share with the banks. This will enable banks themselves to be aware of building leverage and common exposures,” he had said.
RBI collects the data from banks and non-submission of or wrong reporting attracts penalties.
“Banks are advised to take utmost care of data accuracy and integrity while submitting data on large credit to the RBI, failing which penal action...would be undertaken,” the central bank said.
The gross non-performing assets (NPA) of public sector banks rose to Rs1.76 lakh crore at the end of the June quarter from Rs1.55 lakh crore on March 2013.
The ratio of gross NPAs to gross advances for commercial banks rose from 2.36%in March 2011 to 3.92% in June 2013.
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