News

Capital market exposure of Banks may go up If the modified Reserve Bank of India guidelines come into force from January 2007, the aggregated capital market exposure of banks can go up to 40% of their networth on both solo and consolidated basis. However, banks' direct capital market exposure will be limited to 20 percent of their individual net worth. Currently, banks' capital market exposure is restricted at 5 percent of their total outstanding advances. Within the overall new ceiling of 40 percent, banks' direct investment in shares, convertible bonds, debentures, units of equity oriented mutual funds and all exposure to venture capital funds should not exceed 20 percent of their net worth.