Reserve Bank of India has received references from banks seeking clarification on various aspects including inter-alia clarity in the definition of ‘entities’ for which banks shall assess UFCE, exempted exposures / entities, alternative method for smaller entities, assessment of UFCE of entities incorporated outside India by overseas subsidiaries / branches of Indian banks etc.
Further, a comprehensive review of the extant guidelines has been undertaken and all the existing instructions on the subject including the revisions / clarifications on the issues stated above have been consolidated in the Directions enclosed in the circular and Explanatory Note providing the background for these Directions is also enclosed in the circular.
This Circular is applicable to all commercial banks (excluding Payments Banks and Regional Rural Banks) and shall come into effect from 1st January, 2023.
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