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      Question

      Under the RBI's 'Large Exposures Framework' (LEF), the

      sum of all exposure values of a bank to a single counterparty must not exceed what percentage of the bank's Tier 1 Capital?
      A 10% Correct Answer Incorrect Answer
      B 15% Correct Answer Incorrect Answer
      C 20% Correct Answer Incorrect Answer
      D 25% Correct Answer Incorrect Answer
      E 30% Correct Answer Incorrect Answer

      Solution

      As per RBI guidelines to manage concentration risk, exposure to a single counterparty is capped at 20% (extendable to 25% in certain cases) of Tier 1 Capital.

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