RBI asks Banks to have systems to monitor and address risks emanating from exposure to ultra-large borrowers

The Reserve Bank of India (RBI) has instructed lenders to implement concentration risk management policies for exposures to individual counterparties, interconnected groups, and economic sectors.

Financial institutions must create monitoring systems to address risks tied to excessively leveraged ultra-large borrowers with significant banking sector debt.

While banks can determine their own ultra-large borrower classification parameters, they must evaluate comprehensive borrowing levels across the banking system during credit risk assessments. These requirements appear in the Reserve Bank of India (Commercial Banks – Concentration Risk Management) Amendment Directions, 2025.

Published on December 4, 2025