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      Question

      As per “Master Circular of RBI – Exposure Norms”,

      “The exposure” definition shall include which of the following options?
      A Credit exposure (funded & non-funded credit limits) Correct Answer Incorrect Answer
      B Investment exposure (including underwriting & commitments of similar nature) Correct Answer Incorrect Answer
      C Both a and b Correct Answer Incorrect Answer
      D Only fund-based credit limits are included Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      Exposure shall include credit exposure (funded and non-funded credit limits) and investment exposure (including underwriting and similar commitments). The sanctioned limits or outstanding, whichever are higher, shall be reckoned for arriving at the exposure limit. However, in the case of fully drawn term loans, where there is no scope for re-draw of any portion of the sanctioned limit, banks may reckon the outstanding as the exposure.

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