RBI increases Bank’s Aggregate Exposure limit for Small Businesses

Current Context: The Reserve Bank of India (RBI) has announced to increase the bank’s maximum aggregate retail exposure limit to small businesses (turnover upto Rs 50 crore) to Rs 7.5 crore.

• Earlier, this limit was Rs 5 crore. 
• This enhancement in the limit will lead to an increase in credit flow for small businesses. 
• The risk weight of 75% will apply to all fresh exposures as well as to existing exposures where incremental exposures may be taken by banks upto the revised limit i.e. upto Rs 7.5 crore.
• Also, RBI has announced to extend the existing enhanced Held to Maturity (HTM) limit of 22% for SLR securities acquired between 1st Sep 2020 and 31st Mar 2021 and 31st Mar 2022. 
• Thus banks may continue to hold such excess SLR securities in HTM category upto 31st Mar 2022. 
• The enhanced HTM limit will be restored to 19.5% in a phased manner, beginning from the quarter ending of 30th June 2022. 
• Static Part: 
• HQ of RBI: Mumbai
• Governor of RBI: Shaktikanta Das

Question: 

Q.1 RBI has raised bank’s aggregate exposure limit for small business from Rs 5 crore to Rs ___?
a. Rs 7.5 Crore
b. Rs 7 Crore
c. Rs 6.5 Crore
d. Rs 8 Crore