The Reserve Bank of India (RBI) has issued a circular (RBI/2025-26/48, DOR.CRE.REC.27/21.01.003/2025-26) on June 9, 2025, amending its Large Exposures Framework (LEF). This directive, effective immediately, expands the list of exempted exposures for all Scheduled Commercial Banks, excluding Regional Rural Banks. Previously, paragraph 3.1 of the LEF circular dated June 3, 2019, exempted “deposits maintained with NABARD on account of shortfall in achievement of targets for priority sector lending” from being considered for exposure limits. The new amendment extends this exemption to include contributions made by scheduled commercial banks to funds with NHB (National Housing Bank), SIDBI (Small Industries Development Bank of India), MUDRA Ltd., or any other entity specified by the RBI, when these contributions are made due to a shortfall in meeting priority sector lending targets. This regulatory adjustment aims to provide additional flexibility for banks in managing their priority sector lending obligations within the LEF guidelines.
Reserve Bank of India
RBI/2025-26/48
DOR.CRE.REC.27/21.01.003/2025-26 Dated: June 9, 2025
All Scheduled Commercial Banks (Excluding Regional Rural Banks)
Madam / Dear Sir,
Large Exposures Framework – Amendment in the list of exempted exposures
Please refer to paragraph 3.1 of the Annex to the circular No.DBR.No.BP.BC.43/21.01.003/2018-19 dated June 03, 2019 on ‘Large Exposures Framework’ (LEF) in terms of which “deposits maintained with NABARD on account of shortfall in achievement of targets for priority sector lending” are excluded from being considered for exposure limits under LEF.
2. In this connection, it is advised that in addition to NABARD, the above exemption shall also be applicable to contribution made by the scheduled commercial banks to funds with NHB, SIDBI, MUDRA Ltd., or any other entity specified by RBI, on account of shortfall in achievement of targets for priority sector lending.
3. The above instruction is applicable with immediate effect.
Yours faithfully,
(Vaibhav Chaturvedi)
Chief General Manager
