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    Question

    As per RBI, what is the maximum exposure limit of a bank

    to a single borrower in terms of capital funds?
    A 20% of Tier I Capital Correct Answer Incorrect Answer
    B 15% of Tier I Capital Correct Answer Incorrect Answer
    C 10% of Total Advances Correct Answer Incorrect Answer
    D 25% of Risk Weighted Assets Correct Answer Incorrect Answer
    E 40% of Tier II Capital Correct Answer Incorrect Answer

    Solution

    RBI restricts exposure to a single borrower to 15% of the bank’s Tier I capital. This is part of prudential exposure norms to manage credit concentration risk.

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