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RBI Directs Banks To Make Extra Provisions For Top 20 Companies

The decision comes in the wake of the ongoing crisis in banks in Europe and US

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The Reserve Bank of India has advised banks to be ready for any contingency, and set aside provisions for exposure to top 20 conglomerates of India. As per reports, the step is to be considered more as a sign of caution and not a warning signal, owing to the fact that both PSU Banks and private banks are in a better state of affairs now. 

An official confirmation from RBI is still awaited in this regard. 

According to reports, the RBI has been contemplating on this after the annual inspection of Financial Year 2022, and the ongoing collapses of banks in Europe and US has only cemented the decision further. 

Sources have stated that Reliance Industries, Adani Group and Vedanta are some of the names that have heavy exposure to foreign debt and the RBI has been foreseeing issues with banks related to these companies. 

It may be recalled that in the recent meeting with the heads of PSU Banks, the Finance Ministry had asked PSU banks to identify stress points, including subjects like “concentration risks and adverse exposures.