**Executive Summary**
This document is an Amendment Circular issued by the Reserve Bank of India (RBI) modifying the "Guidelines on Management of Intragroup Transactions and Exposures" (ITE Circular) dated February 11, 2014. The amendments, which focus on intragroup exposure limits and capital base definitions, will come into effect on April 1, 2026, although early implementation is permitted. Draft comments are requested.
**Key Points / Main Content**
* **Paragraph 2.4(c) Amendment:**
* Branches in other jurisdictions that are part of a parent bank's operations are not covered by the intragroup exposure limits in para 3.3.
* Indian banks' exposures to their overseas branches, and exposures of foreign banks operating as branches in India (FBB) to their Head Office (HO) overseas branches or subsidiaries of the parent bank Head Office in any jurisdiction are not covered, except for proprietary derivative transactions.
* **Paragraph 3.2 Amendment:**
* The definition and method of computation of exposure shall be prescribed in the Master Circular on Exposure Norms in terms of para 7 of the circular Large Exposures Framework dated June 3, 2019, as amended from time to time.
* **Paragraph 3.3 Amendment:**
* References to 'Paid-up Capital and Reserves' in para 3.3 (a) and 3.3(b) are replaced with 'eligible capital base'.
* Existing intragroup exposures exceeding the prescribed limits must be brought within those limits within six months from the date of this amendment circular.
* "Eligible capital base" is defined as in the Large Exposures Framework dated June 3, 2019, as amended.
* **Effective Date:**
* The amendments take effect from April 1, 2026, but banks can choose to implement them earlier.
**Impact Analysis**
**Banks**
*Impact:*
Banks are directly affected by the changes to intragroup exposure limits, the definition of "eligible capital base," and the new implementation timeline.
*Action Required:*
Banks need to review their intragroup transactions and exposures to ensure compliance with the amended guidelines. They should update their capital base calculations and may need to adjust exposures within six months of the circular's date. Banks should also prepare for implementation by April 1, 2026, or consider implementing the changes earlier.
**Foreign Banks Operating as Branches in India (FBB)**
*Impact:*
FBBs need to be aware that their exposures to their Head Office (HO) are no longer covered by these guidelines.
*Action Required:*
FBBs should take note of the removal of coverage for exposures to HO. They should not require any action, but awareness is necessary for compliance.
Key Entities Referenced
Banking Regulation Act, 1949: Indian law that empowers the Reserve Bank of India (RBI) to regulate and supervise the banking sector.
Guidelines on Management of Intra-Group Transactions and Exposures (ITE Circular): RBI guidelines on managing intragroup transactions and exposures of banks.
Large Exposures Framework: Framework for limiting banks' exposure to single counterparties or groups of connected counterparties.
Reserve Bank of India: Central bank of India.
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
_________________________ ______________________
www.rbi.org.in
Draft for Comments
RBI/2025-26/__
DOR.CRE.REC.__/21.01.003/2025-26 DD-MM-YY
Guidelines on Management of Intragroup Transactions and Exposures
(Amendment Circular), 2025
Please refer to Guidelines on Management of Intra-Group Transactions and
Exposures (hereinafter referred to as the “ITE Circular”) dated February 11, 2014.
2. On a review, in exercise of the powers conferred by the sections 21 and 35A of the
Banking Regulation Act, 1949 and all other laws enabling the Reserve Bank in this
regard, the Reserve Bank being satisfied that it is necessary and expedient in the
public interest to do so, hereby issues the Amendment Circular hereinafter specified.
3. This Amendment Circular modifies the ITE Circular as under:
(i) Paragraph 2.4(c) of the Annex to the ITE Circular shall stand modified as
under:
“The branches in other jurisdictions being part of a parent bank’s operations are
not covered under the intra-group exposure limits stipulated in para 3.3.
Accordingly, Indian banks’ exposures to their overseas branches and exposure
of foreign banks operating as branches in India (FBB) to their Head Office (HO),
overseas branches or subsidiaries of the parent bank Head Office in any
jurisdiction, except for proprietary derivative transactions undertaken with them,
are not covered under these guidelines.”
(ii) Paragraph 3.2 of the Annex to the ITE circular, shall stand modified as under:
“…The definition and method of computation of exposure would be as
prescribed in the Master Circular on Exposure Norms in terms of para 7 of the
विवियमि विभाग, केंद्रीय कायाालय, केंद्रीय कायाालय भिि, 12िी/ीं 13िी ींमींव़िल, शहीद भगत व ींह मागा, फोर्ा, म ींबई - 400001
र्ेलीफोि/ Tel No: 22661602, 22601000 फैक्स/ Fax No: 022-2270 5691
Department of Regulation, Central Office, Central Office Building, 12th/ 13th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai – 400001
हहदिं ी आसान ह,ैं इसका प्रयोग बड़ाइएcircular Large Exposures Framework dated June 3, 2019, as amended from
time to time….”
(iii) In para 3.3 (a) and 3.3(b), reference to ‘Paid-up Capital and Reserves’ shall be
substituted with ‘eligible capital base’, and the following proviso shall be inserted at
the end of the paragraph:
“Provided that the existing intragroup exposures, including committed lines (if
any), in breach of the aforesaid limits shall be brought within the prescribed
limits within six months from the date of this amendment circular.
Explanation 1: Eligible capital base shall be as defined in the Large Exposures
Framework dated June 3, 2019, as amended from time to time.”
4. The above amendments shall come into force from April 1, 2026. Banks may
however decide to implement the amendments in entirety from an earlier date.
(Vaibhav Chaturvedi)
Chief General Manager
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