HDFC breaches RBI limits on loans to Reliance

HDFC Bank has “exceeded” the single borrower limits prescribed by regulator RBI in case of its credit exposure to Reliance Industries Ltd. (RIL).

The bank, however, said its board of directors approved “the said excess in respect of this exposure” and it was within the 20 per cent ceiling of capital funds.

The central bank has fixed the credit exposure ceiling of a bank at 15 per cent of capital funds in case of a single borrower and at 40 per cent in case of a borrower group.

The RBI allows banks to enhance this exposure by further 5 per cent of capital funds in exceptional circumstances, with approval of their boards.

Without disclosing the exact amount of the exposure to RIL, HDFC Bank said, “During the year ended March 31, 2015, the bank’s credit exposures to single borrowers and group borrowers were within the limits prescribed by the RBI except in case of Reliance Industries Limited, where the single borrower limits were exceeded.”

An HDFC Bank spokesperson said the bank has acted totally within regulations.