State-run banking giant SBI has said it temporarily exceeded RBI-prescribed credit exposure limit for the fourth year in a row in 2011-12 with regard to loans given to Mukesh Ambani-led Reliance Industries (RIL). During the fiscal ended March 31,2012,State Bank of India (SBI) also breached RBI's single borrower exposure norms in case of loans to two state-run entities - Indian Oil Corp (IOC) and Bharat Heavy Electricals Ltd (BHEL). The exposure was brought down within the RBI-prescribed limits for all the three borrowers (RIL,IOC and BHEL) at the end of the financial year on March 31,2012,the country's largest bank has disclosed in its annual report for 2011-12. SBI exceeded the limit by about Rs 500 crore in case of loans to RIL,while the limit was exceeded by about Rs 4,000 crore in case of IOC and by about Rs 3,000 crore for loans to BHEL for certain periods. At the end of the fiscal,the bank's outstanding loan to RIL stood at Rs 6,867.32 crore,Rs 24,374.33 crore to IOC and Rs 13,522.21 crore to BHEL - all of which were within the RBI's prudential single borrower exposure limits. On the other hand,private sector banking giant ICICI Bank,which had also temporarily breached RBI's single borrower exposure norms in 2010-11 with respect to its loans to RIL,did not exceed the limits for any borrower in 2011-12. "During the year ended March 31,2012,the Bank has complied with the Reserve Bank of India guidelines on single borrower and borrower group limit," ICICI Bank said in its latest annual report. As per RBI's prudential credit norms,a bank can't give loans in excess of 15 per cent of its capital funds to a single borrower,but can exceed this limit by 5 per cent in exceptional cases with prior approval of their boards. Detailing the cases where it breached prudential limits for single-borrower exposure during the fiscal ended March 31,2012,SBI has named RIL,IOC and BHEL as three such borrowers in its annual report. While SBI had exceeded RBI's limits for these three in 2010-11 as well,it had provided credit in excess of the prudential norms to RIL,IOC,BHEL and Tata Group in 2009-10. Prior to that,SBI exceeded prudential credit limits during 2008-09 with regard to its exposure to RIL and IOC. As per RBI guidelines,the exposure ceiling limits are 15 per cent of capital funds in case of a single borrower and 40 per cent of capital funds in the case of a borrower group. However,the credit exposure to a single borrower can go up to 20 per cent,if the additional 5 per cent exposure is on account of extension of credit to infrastructure projects. Similarly,the credit exposure to borrowers belonging to a group may go up to 50 per cent,if the additional 10 per cent exposure is for credit to infrastructure projects. With regard to the single-borrower exposure limits in 2011-12,SBI said in its annual report that its credit sanctioned to RIL at Rs 15,214.49 crore exceeded the exposure ceiling of Rs 14,779.58 crore in January 2012. In February 2012,its sanction limit of Rs 15,358.18 crore again exceeded the exposure ceiling of Rs 14,783.26 crore. During the previous fiscal 2010-11,SBI's credit to RIL breached the prudential ceiling on three occasions during the year - between April and July 2010,from August to October 2010 and from November 2010 to February 2011. The outstanding exposure to RIL as on March 31,2011 stood at Rs 5,645.44 crore,which was within the limits. For IOC,the credit exposure exceeded the ceiling twice - from April 2011 to January 2012 and from February to March 2012. In the first case,the limit sanctioned was Rs 28,953.68 crore as against a ceiling of Rs 24,632.64 crore,while these were Rs 28,114.56 crore and Rs 24,638.76 crore respectively on the second occasion. SBI's exposure to BHEL also breached the prudential norms twice - from April 2011 to January 2012 and from February to March 2012. The limit sanctioned for BHEL in the first case was Rs 17,670 crore as against a ceiling of Rs 14,779.58 crore,while these were Rs 17,670 crore and Rs 14,783.23 respectively in the second case. During 2010-11,the exposure limits were exceeded on three occasions for IOC and BHEL. The ceilings were breached thrice each for IOC,RIL and BHEL,and twice for Tata Group in 2009-10. The credit exposure was in excess of the permitted level on three occasions for both RIL and IOC in 2008-09.
