RBI relaxes norms for sanctioning of loan to relatives of directors/ directors of other banks

The RBI has revised the limit of amount that banks can sanction without board’s approval to directors of the other banks, relatives of their own directors (other than spouse), any firm in which relative is interested as partner or guarantor. The limit has been hiked to Rs. 5 crores. As per the extant norms, sanction by board for grant of loans to a company is required, where relative of a director holds 10 % of paid-up capital or Rs 5 lakh, whichever is less.The RBI has revised the limit of amount that banks can sanction without board’s approval to directors of the other banks, relatives of their own directors (other than spouse), any firm in which relative is interested as partner or guarantor. The limit has been hiked to Rs. 5 crores. As per the extant norms, sanction by board for grant of loans to a company is required, where relative of a director holds 10 % of paid-up capital or Rs 5 lakh, whichever is less.taxmann.com Latest Statutory HappeningsRead More

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