As per the Large exposure framework, banks can have a maximum exposure up to 20% of ______, to a single borrower.

Solution

As per the Large exposure framework, banks can have a maximum exposure up to 20% of of the bank’s available eligible capital base at all times , to a single borrower. In exceptional cases , Board of banks may allow an additional 5% exposure of the bank’s available eligible capital base, through Board approved policy. For group of connected counterparties, the sum of all the exposure values of a bank must not be higher than 25 % of the bank’s available eligible capital base at all times