RBI Revises Large Exposures and Intragroup Transactions Guidelines

On 4-12-2025, the Reserve Bank of India (‘RBI’) issued a notification announcing amendments to the Large Exposures Framework (‘LEF’) and Intragroup Transactions & Exposures (‘ITE’). These changes represent a significant step toward consolidating regulations, addressing prudential gaps in the treatment of foreign bank branch exposures, and enhancing methodological clarity for banks.

Key Highlights:

1. Earlier, on 29-9-2025, RBI released draft amendment circulars, seeking stakeholders feedback, on:

   • Large Exposures Framework (‘LEF’) (Amendment Circular), 2025

   • Guidelines on Management of Intragroup Transactions and Exposures (‘ITE’) (Amendment Circular), 2025

2. The amendments proposed primarily addressed the prudential treatment of exposures of foreign bank branches in India to their head office and group entities.

3. After close analysis of feedback received, RBI has now issued the Commercial Banks — Concentration Risk Management Amendment Directions, 2025.

4. These Directions clarify methodological aspects of calculating LEF and ITE.

5. The Directions aim to strengthen risk management practices and ensure consistency in regulatory treatment across foreign bank branches.