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EN
As central bank eases lending regime, it must be mindful of risks
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The Indian Express
One, the RBI is allowing banks to “finance acquisitions” by Indian corporates, an activity they have been prohibited from.
Two, it is also easing the flow of funds to large borrowers by proposing to scrap its 2016 framework that had placed restrictions on lending.
But there is the risk of “reckless borrowing” by corporates, as a report in this paper points out.
Alongside, the central bank has proposed to increase banks’ lending limit against shares to Rs 1 crore and for IPO financing to Rs 25 lakh.
Investors welcomed these announcements with shares of banks such as HDFC, ICICI and Kotak rising on the day.