The Reserve Bank on Friday proposed a framework with objectives of ensuring prudence while allowing operational flexibility to banks when they lend to related parties.
The RBI has issued draft 'Reserve Bank of India (Lending to Related Parties) Directions, 2025' with the aim to provide a harmonised, principle-based framework to be adopted by regulated entities (REs) for inter alia lending to related parties.
The draft introduces scale-based materiality thresholds beyond which lending to related parties of an RE would need approval of the board or its committee.
Copyright © 2017 Indian Grapevine a unit of Integrated Media Enterprises
