It is not uncommon to find a borrower availing term loan as well as
working capital limits from a number of financial institutions and commercial
banks. A term loan to a borrower may be sanctioned jointly by All India Financial
Institutions and Banks. Similarly, working capital limits may also be availed
by the borrower from a number of banks partly because of the large size of
borrowing and partly to have a degree of flexibility in his operations with
different banks.
The borrower may have a multiple banking relationship where he has
independent arrangement with each bank, security offered to each bank is
separate and no formal understanding exists between different banks financing
the same borrower. Under this arrangement banks may not be exchanging
information on the borrower and limits might have been sanctioned on different
terms and conditions. This arrangement may be preferred by the borrower as it
affords him a great flexibility in operating his accounts with different banks
but goes contrary to the expectations
of Reserve Bank which desires that a wholesome view of entire operations
of a customer must be taken by the banks and the assessment of credit needs be also done in totality.
The other arrangement for sanctioning of credit limit to such a borrower
may be to form a consortium of banks to take care of the entire needs, of the
borrower. No definite guidelines on formation of consortium of banks, however,
existed in past and it was generally left to the borrower to decide this issue.
The first attempt in this regard was made by Reserve Bank of India while
it constituted a study group in December, 1973, headed by Shri G.
Lakshmmaryanan, which submitted its report in July, 1974. The report was
accepted by Reserve Bank.
The concept of consortium advance has since gone many changes and most
of the large borrowers are now being financed by banks in consortium. Reserve
Bank of India had also issued revised comprehensive guidelines in June 1987 on
this subject.
Reserve Bank of India further constituted a Committee in January, 1993.
under the Chairmanship of Shri J.V. Setty, Chairman and Managing Director,
Canara Bank, to review the extant guidelines on lending under consortium arrangement
and suggest measures for improving the efficiency of banking system in delivery of credit. Based upon the
report submitted by the above Committee, Reserve Bank announced important
changes in die existing guidelines. Guidelines m applicable to consortium
advance are as under.1
·
The overall exposure
to a single borrower should not exceed 25%2
of the net worth of the banking institution. For this purpose non fund based
facilities shall be counted @ 50%3
of limits sanctioned and added to total fund based facilities to arrive at
total exposure to the borrower.
·
Exposure limit to
group has also now been stipulated. The overall exposure to a group should not
exceed 50%2per
cent (60%2
in case of infrastructure projects
consisting of power,
telecommunication, roads and ports) of the net worth of the banking
institution.
(a)
The borrowers who are
already having multiple banking arrangement and enjoy fund based credit limits
of Rs. 50.00 crores or more must
necessarily be brought under consortium arrangements. The bank who is having
the largest share in the credit facilities would automatically become the
leader of consortium and would ensure that consortium arrangements are
finalised immediately.
(b) The borrowers who are already having multiple banking arrangement
and enjoy fund based credit limits of less than Rs.50 crores should also be
brought under formal consortium arrangements at the time of further
enhancements which would take the aggregate limits to Rs.50 crores or more. The
enhancements in such cases would be considered jointly by the financing banks
concerned and the bank which takes up the largest share of fund based limits
shall be the leader of the consortium.
(c) These provisions would also be applicable to new units which
approach more than one bank for sanctioning of working capital limits of Rs.50
crores or more.
The net effect of these provision amounts to
that no borrower will be allowed to have multiple banking arrangement if the
total fund based credit limit sanctioned to him amounts to Rs.50 crores or
more. A formal consortium will have to he constituted in such cases and the
bank having largest share in fund based credit limits will automatically assume
the status of the leader of the consortium.
Reserve Bank has since withdrawn its
instructions for obligatory formation of consortium. It will thus not be
obligatory on the part of banks to form a consortium even if the credit limit
per borrower exceeds Rs.50
crore. The need based finance required by the borrowers may,
therefore, be extended by the banks either entirely on their own, subject to
observance of exposure limits, or in association with other banks. As an
alternative to sole/multiple banking/consortium arrangement, banks may adopt
loan syndication route, irrespective of the quantum of credit involved.
·
There is no ceiling on number of banks in a consortium, whether it is obligatory (fund‑based
credit limits of Rs.50 crates and above from more than one bank) or voluntary
(fund based credit limits below Rs.50 crores from more than one bank) in
nature. However, the share of a bank as member of consortium should he a
minimum of 5 per cent of the fund based credit limits or Rs.1 crore whichever
is more. This provision would itself restrict the number of banks in a
consortium. To illustrate this point let us consider these two examples:
(a) In a consortium for total fund based credit limits of Rs.3 crores, the
minimum share should be Rs1.00 crore.
(b) In a consortium for total fund based credit limits of Rs.50 crates, the
minimum share should be Rs.2,50 crores.
·
The banks who have sanctioned term loans to a
unit or who have also participated in term loans sanctioned in consortium with
term lending financial institution should also provide working capital
facilities to such a unit. 'These banks may, however, associate other banks, if
so warranted, to provide working capital finance.
·
The borrower who is being financed under a
formal consortium arrangement should not avail any additional credit facility
by way of bills limits/ guarantees/acceptances, letters of credit etc. from any
other bank outside the consortium. It has been stipulated by Reserve Bank of
India that any bank outside the consortium should not extend any such facility
or may not even open a current account without the knowledge and concurrence of
the consortium members.
This stipulation is applicable to even those borrowers who are enjoying
total fund based credit limits of above Rs.50 crores from a single bank or
under syndication without a consortium arrangement.
·
In case of borrowers enjoying aggregate fund‑based
credit limits of Rs.1 crore and above but below Rs.50 crore from more than one
bank, and where there is no formal consortium arrangement, banks should obtain
full details of the credit facilities (including ad hoe facilities) availed of
by such borrowers from the banking system, each time any fresh
facility/enhancement is sought. Also the banks should ensure timely exchange of
information and co‑ordinated approach in the interest of overall health
of advance made to such borrowers. Further, in the case of borrowal accounts
enjoying fund‑based credit limits below Rs.50 crore from more than one
bank, the concerned banks will be free to enter into a consortium arrangement
at their option.
·
Banks/consortia treat borrowers having multi‑division/
multi‑product companies as one single unit, unless there is more than one
published balance sheet. Similarly, in the case of merger, the merged unit will
be treated as a single unit. In case of split, the separated units will be
treated as separate borrowal accounts provided there is more than one published
balance sheet.
·
In case of borrowers enjoying fund‑based
credit limits of Rs.50 crore and above, the concerned single bank and/or the
leader of the existing consortium, will be free to organise a 'syndication' of
the credit limits.
·
In cases, where banks/consortia/syndicates am
unable to adhere to the recommended maximum time‑frames for disposal of
loan applications/ proposals, borrowers will be free to bring in a new bank or
new banks to form/ to join a consortium/syndicate. Within seven days of
sanction of any credit facility, such new banks should inform the existing
consortium/syndicate/ regular banks/(s) and. should not disburse the limit
without obtaining 'no objection'. In case such 'no objection' certificate is
not received within next ten days, it would be doomed that existing
consortia/syndicates/regular bank/(s) have no objection to the new bank/(s)
joining/forming consortia/syndicates.
·
In the cases of existing consortia, if a member‑bank
is unable to take up its enhanced share, such enhanced share in full or in part
could be reallocated among the other existing willing members. In case other
existing member‑banks are also unable to take up such enhanced share of
an existing & member‑bank, a new bank willing to take up the enhanced
share may be inducted into the consortium in consultation with the borrowers.
·
While a member‑bank may be permitted not
to take to up its enhanced/incremental shares it cannot be permitted to leave a
consortium before expiry of at least
two years from the date of its joining
the consortium. An existing member‑bank
way be permitted to withdraw
from the consortium after two years provided other existing member‑banks
and/or a new bank is willing to take its sham by joining the consortium.
·
In cases whore the other existing member‑banks
or a new bank an unwilling to take over the entire outstanding of an existing
member desirous of moving out of the consortium after the expiry of above‑mentioned
period of two years, such bank may be permitted to leave the consortium by
selling its debt at a discount and/or furnishing an unconditional undertaking
that the repayment of its dues would be deferred till the dues of other members
are repaid in full.
Note : It would be open to a borrower to choose his bank/(s) for
obtaining credit facilities as also for the bank/(s) to take a credit decision
on the borrower. However, once a consortium (obligatory or voluntary) is
formed, on" of a new member into a consortium should be in consultation
with the consortium.
·
Quite often non‑availability of data or
submission of incorrect data or non‑receipt of required financial
statements results in banks/consortia being not able to take decisions within a
stipulated period of time. These data/
·
statements include, among other, audited
financial results for the last two years, estimated and projected results for'
the current and subsequent years respectively. More often than not borrowers
require an average time of at least six months to obtain audited financial
statements. Considering all these aspects as also available technology, the
following maximum time‑frames are prescribed for formal disposal of loan
proposals provided applications/proposals are received together
·
with required details/information supported by
requisite financial and operating statements :
Proposals for sanction of fresh/enhanced credit limits 60
days (45 days)
Proposals for renewal of existing credit limits 45
days (30 days)
Proposals
for sanction of ad hoe credit facilities 30
days (15 days)
Note: Figures in brackets are the maximum time frames for sanction of
export credit limits.
·
Further, individual banks/consortia/syndicates
should review the borrowal accounts during the first quarter of the current year
on the basis of audited statements for the year before lust, provisional
statements (where audited statements are not available) for the last accounting
year, provisional estimates for the current accounting yew and forecast for the
next year. Consequently, individual banks/consordia/syndicates, at their
discretion, may release 50 per cent of the additional credit requirement during
or before the second quarter of the current accounting year. The remaining 50
per cent could be released consequent to submission of audited results provided
there is no significant difference between the provisional estimates and the
audited results.
·
No bank will be
allowed to move out of the consortium in case of sick/weak units since in such cases all the banks are required to associate
themselves with rehabilitation efforts.
·
The appraisal of credit proposals will be done
by the lead bank.
The customer has to submit all the necessary papers and data regarding
appraisal of his limits to the lead bank who will in turn arrange for
preparation of necessary appraisal note and its circulation to other member
banks. Lead bank must complete the entire work relating to appraisal within the
maximum time frame. Reporting to and attending to any correspondence with
Reserve Bank of India shall also be the responsibility of lead bank.
·
There may sometimes be disagreement between the
member banks on the quantum of permissible bank finance, terms and conditions
or any other matter. In such cases, decision of the consortium will be binding
on the lead bank as also other members. Lead bank will however, enjoy the
freedom to sanction an additional credit upto a pre‑determined percentage
in emergent situations. The lead bank should however, inform other members
immediately together with their pro‑rata share.
·
There also exists a provision for forming
steering committee consisting of leader bank and the bank with next highest
share in the consortium. Normally steering committee banks must have more than
5 1 % share. Wherever consortium fails to reach the consensus, other member
banks shall follow the decision of the steering committee.
·
Earlier, the terms and conditions including
rate of interest, margin etc. finalised at the consortium meeting were
uniformly applicable to all banks. Reserve Bank has however, relaxed the
guidelines in this regard with freedom granted to banks to determine their own
lending rates for advances above Rs.2 lacs. The banks in a consortium will now
be free to offer different rates of interest and other charges on their shares.
·
The ancillary and non‑fund based business
should also be passed on by the borrower to all the member banks in almost the
same proportion in which funds based limits are shared.
·
The inspection/verification of securities may
be done by the lead bank or members in rotation as per arrangement which may be
finalised in the consortium.
·
The quarterly operating statements as required
under Chore Corn mince for fixation of quarterly operative limits will also be
required to be sent to the lead bank who shall in association with the bank
having the next largest share in the credit facilities should meet at quarterly
intervals and fix the operative limits and also individual bank's share thereof
for the next quarter.
·
The information regarding quarterly operating
limits fixed in such a manner would be communicated by the lead bank to other
member banks.
·
In a consortium, lead bank or the lead bank and
the bank with the next highest share will be the final authorities in case of
differences of opinion and their views will prevail in all cases of disputes
among the member relating to terms and conditions.
From the above discussion it will be appreciated that the borrower under
the consortium arrangements is required to deal with the lead bank and bank
having second largest share in total credit limits for an practical purposes.
The borrowers were, however, put to inconvenience for execution of varied types
of documents etc. with various banks in the consortium. On the recommendations
of 'Mahadevan Committee' who submitted its report in April, 1988, Reserve Bank
revised guidelines in relation to consortium advances and the ultimate ideal
set for the banking industry is to achieve 'Single Window Concept For Lending
(SWCL), to minimise delay and inconvenience to the borrowers. Single Window
Concept has now been brought into operation in respect of two important areas
of lending in consortium as under:
Lead bank in all consortium will have the authority from each of the
other member banks to make available their shares of entire/enhanced limits if
latter's decision is not conveyed to the lead bank within the prescribed time
of two months. The borrower will thus be able to avail first disbursement from
the lead bank itself, if other member banks delay their decision. However,
after first disbursement as above, the borrower will be allowed to operate his
accounts with different member banks according to his requirements subject to
the limits allocated to them.
Important recommendations
as accepted by Reserve Bank for implementation are as given below:
(i) The borrower should tie
required to execute only one document, which will be signed by the lead bank on
its own behalf as well as on behalf of other members.
(ii) The lead bank should complete the formalities connected with creation and registration of charge etc. with the Registrar of Companies.
(iii) As soon as the documents
are executed, the lead bank shall send a confirmation in this regard to other
members by telex/telegram.
(iv) The sharing of security and
the rights and responsibilities of the banks, including the lead bank, should
be documented by means of an inter se agreement among the members of the
consortium.
To bring, in the uniformity in respect of type of documents to be
obtained by different banks. Indian Bank. Association has finalised model
documents to be adopted by all the banks uniformly. The document procedure as
recommended by IBA for implementation by the banks has been revised and now the
execution of following documents:
(i) Resolutions
to be passed by the borrower's Board of Directors authorising the borrowing
company to borrow under the consortium arrangement.
(ii) Working
capital consortium agreement.
(iii) Joint
deed of hypothecation.
(iv) Revival
letter for purposes of limitation.
(v) Letter of
undertaking from the borrower for creating a second mortgage on the fixed
assets.
(vi) Agreement
to be signed with the lead bank who signs on behalf of itself and on behalf of
other member banks.
Model forms for all these documents have already been circulated by IBA
to all the banks for implementation and borrowers may approach their bank to
get copies of these documents. In addition the banks are required to sign
various inter se agreements as per revised proformae
adopted by IBA .
As per the norms specified by Reserve Bank each borrowal account is to
be classified in any of the four categories as under:
(i) Standard
Asset
(ii) Sub‑standard
Asset
(iii) Doubtful
Asset
(iv) Loss
Asset
The banks are further required to make provisioning at the prescribed
rates in their profit and loss ale on the basis of the above classification at
the time of finalising their annual accounts. Classification of borrowal account
has thus assumed an added significance.
As per the practice, member banks were following the classification as
given by the lead bank in a consortium. It has now been stipulated by Reserve
Bank that each member bank will classify the ale on its own keeping in view the
relevant guidelines. If any bank under the consortium classifies the ale as 1
sub‑standard' all the Banks under the consortium will have to classify
such ale as 'sub‑standard'. This stipulation has been brought into effect
to ensure that borrower lakes steps to maintain his a/cs with all member banks
free of irregularities.
Reserve Bank has permitted the lead bank to charge a suitable fee (say
0.25 per cent of the limits) per annum for various services rendered to the
borrower. Detailed guidelines in this regard are as under:
(a) The
fee of 0.25 percent per annum is to be reckoned with reference to the fund
based working capital credit limits sanctioned by the consortium.
(b) The
rate of fee may be negotiated with the borrowers with the ceiling of 0.25%.
(c) Service
charge on enhancement of limits after regular sanction has taken place will be
charged on the amount of enhancement/incremental limits.
(d) No
fee is payable on syndication of limits.
(c) No
service charge is to be levied on working capital limits authorised under
special arrangements, by Reserve Bank of India for procurement/purchase under
price support/market intervention operations etc. to public sector corporations
or agencies of State Government.
It may be mentioned here that formation of consortium is no more
obligatory and instruction relating to conduct of consortium which were issued
by Reserve Bank Iron, time to time have also been withdrawn. Consortium members
have been given powers to frame their own ground roles governing the consortium
arrangement viz. number of participating banks, minimum share of each bank,
entry into/exit from the consortium, sanction of additional/adhoc limit in
emergent situations/contingencies by lead banks/ other banks, the fee to be
charged by the lead bank for the services rendered by it, the grant of any
facility by a non‑member bank etc.
Consortium arrangement of lending for working capital needs will
continue to exist for operational convenience of the participating banks as
well as borrowers. The ground rules of consortium arrangements discussed in
earlier paragraphs will also hold good in most of the cases with certain
modifications and hence may be considered relevant.
A syndicated credit is an agreement between two of more lending
institutions to provide a borrower a credit facility using common loan
documentation. A prospective borrower intending to raise resources through this
method awards a mandate to a bank as 'Lead Manager' to arrange credit on his
behalf. The mandate spells out the commercial terms of the credit and the
prerogatives of the mandated bank in resolving contentious issues in the course
of the transaction. The mandated bank prepares an Information Memorandum about
the borrower in consultation with the latter and distributes the same amongst
the prospective lenders soliciting their participation in the credit to be
extended to the borrower. The Information Memorandum provides the basis for
each lending bank making its own independent economic and financial evaluation
of the borrower, if necessary, by seeking additional supporting information
from other source as well Thereafter, the mandated bank convenes a meeting to
discuss the syndication strategy relating to coordination, communication and
control within the syndication process and finalises deal timing. charges
towards management expenses and cost of credit, share of each participating
bank in the credit, etc. The loan agreement is signed by all the participating
banks. The borrower is required to give prior notice to the ‘Lead Manager’ or
his agent for drawing the loan amount to enable the latter to tie up
disbursements with the other lending banks. Syndication is thus very similar to
the system of consortium lending in terms of disposal of risk and is a
convenient mode of raising long‑term funds by borrowers.
Banks are now taking increasing share in term loans sanctioned to
borrowers by financial institutions. Granting of working capital assistance
remains in the exclusive domain of commercial banks. To avoid delay in project
implementation, it is desired that concept of 'single window clearance' is
brought into operation. It is, therefore necessary that commercial banks either
taking a share in term loans and/or financing working capital are associated by
all India financial institutions at the appraisal stage of the project. For
this purpose, all India financial institutions have to form a consortium with
commercial banks and have proper co‑ordination in dealing with new
investments either by existing companies (as modernisation, diversification,
expansion) or by new companies. A summary of important guidelines issued by
Reserve Bank in this regard is given below:
Association of commercial banks with the project appraisal: The promoter
of a project must identify commercial bank(s) who should be willing to extend
term loan and/or working capital finance for the project. The bank which is to
take the maximum share of term loans among the banks and/or working capital
finance should be associated with appraisal exercise initiated by lead
financial institutions. The lead bank is to be given full opportunity for
expressing views at the time of appraisal. The bank will not be allowed to
withdraw unilaterally from the consortium at a later date. Where more than one
bank is associated, the appraisal as finalised jointly by the lead financial
institutions and the lead bank should be accepted by other banks. An added
advantage of this exercise would be correct estimation of margin required for
working capital as part of project cost and help early sanction of requisite
working capital limits after sanction of term loan assistance.
Extent of participation in term loan by banks: Restriction earlier
imposed by Reserve Bank on participation in term loans by banks were related to
the cost of project which have since been modified. The restriction is now
placed on the basis of quantum of loan irrespective of the cost of project. The
present position in this regard is now as under:
(i) The quantum of loan
will be the determining criterion and not the cost of the project.
(ii) Maximum
quantum of term finance/loans sanctioned by a commercial bank together with its
other exposures in the form of fund‑based
and non‑fund based
credit facilities, investments, underwriting,
and any other commitment,
will be restricted to the prudential exposure norm, as prescribed by the
Reserve Bank of India from time to time, for individual borrowers/group of
borrowers. The earlier ceiling of Rs. 50 crores for individual bank has since
been withdrawn.
(iii) Subject
to an individual ceiling of term loan for a bank, as per (ii) above various
banks in consortia/syndicate may give loans uptoRs.500 crore for each project.
(iv) For
projects requiring term finance assistance exceeding Rs.500crore, banks shall
continue participating jointly with All India Financial Institutions, subject
to share of individual banks not exceeding as per (it) above and that of the
banking system Rs.500 crores.
Ground Rules for Co‑ordination
between hooks and financial institutions1
(1) Time frame for sanction
of facilities:
(a) If
only two lenders we involved, all the issues with regard to sanction of
facilities should be resolved by them by mutual discussion within 60 days front
the date of sanction by the lead,
(b) Where
more than two lenders we involved, their agreement or disagreement for sanction
of facilities must he conveyed by the lead within 60 days from the date of
receipt of complete loan application. The other participating institutions must
convey their decision within 60days from there receipt of appraisal note from
the lead.
(c) Prima facie rejection of
the proposal should be conveyed within 30 days.
(d) Sanction
in the case of fresh loan proposals involving more than 2 lenders should be
conveyed within two months from the date of appraisal note by the lenders.
(e) Where restructuring
is involved, the lead should complete the process within 3 months from die
receipt of complete proposal and the other participants should convey their
decision within 2 months from the receipt of appraisal note.
(2) Asset
Classification: Banks and Financial Institutions may classify the, recounts
based on their performance as per their books. In cases of restructured and
consortium accounts the classification should he same for ill lenders.
(3) Disciplinary
Borrowers: The views of the majority of lenders, in a consortium (say 70% of
total funded exposure), on a consortium specific basis, should he adopted in
regard to changing the management of a defaulting borrower unit.
(4) Levy
of Charges: Consortium members should decide the rate of interest to be charged
oil borrowal accounts. Punitive charges/penal interest, if any, should not
exceed two percentage points above the contracted rate.
(5) Group
Approach: Normal funding requirements of the healthy units belonging to a group
should not be hampered by adopting group approach.
(6) Sharing
of Securities and Cash Flow: Exact modalities with regard to sharing of
securities and cash flow has it) he worked out between the consortium members.
Working Capital Finance by Non
Consortium Financial Institution
2
In the case of
borrowers, whose working capital is financed under it multiple banking
arrangement, file financial institution should obtain an auditor's certificate
indicating the extent of funds already borrowed, before considering the request
of the borrower for further working capital finance.
Prudential Norms
1
for Exposure Limits w.e.f. April, 2002
To ensure that the banks have proper spread in their advance portfolio
and do not commit large resources to a single borrower/group for better risk
management, Reserve Bank of India has stipulated prudential norms for exposure
to a single borrower or group as under:
(a) The overall exposure to a single borrower shall not exceed 15% (20% in case of credit to infrastructure projects) of the capital funds of the banking institution.
(b) The
overall exposure to a group shall not exceed 40% of the capital funds of the banking
Institution (50% in case of credit to infrastructure projects)
Exposure shall include credit exposure (funded and non‑funded
credit limits) and investment exposure (underwriting and similar commitments)
as well as certain types of investments in companies. The sanctioned limits or
outstandings, whichever are higher, shall be reckoned for arriving at exposure
limit. With effect from 1.4.2003, non‑fund based exposures should also be
reckoned at 100% of the limit or outstandings. Loans and advances granted
against the security of bank's own term deposits may be excluded from the
purview of the exposure ceiling. For details refer to Chapter 3 of the Book.
Banks must ensure that its overall commitment to a single borrower/group
is invariably within the exposure limit as per prudential norms. No exception
in this regard is permitted by Reserve Bank of India except the following
exemptions:
(a) The
exposure limits would not he applicable to existing/additional credit
facilities to weak/sick industrial units under rehabilitation packages; and
(b) Borrowers
to whom limits we allocated directly by the Reserve Bank, for food credit, will
be exempt from the ceiling.
[R1] Reserve Bank of India has since permitted the banks to decide modalities of the functioning of consortium. Banks may therefore, decide on all issues including rates of interest, allocation of limits, sharing pattern, sanction of adhoc limits etc. in the consortium meting The guidelines issued by Reserved Bank may thus be taken as indicative only.
[R2]The exposure ceiling limits applicable from 1.4.2002
is 15 percent of capital fund in case of single borrower and 40 percent in the
case of a borrower group. In case of credit to infrastructure projects this
ceiling shall he enhanced to 20% in case of a single borrower and 50% in case
of a group.
[R3]Effective from April 1, 2003. non‑fund based
exposure shall he taken at 100%.
[R4]The exposure ceiling limits applicable from 1.4.2002
is 15 percent of capital fund in case of single borrower and 40 percent in the
case of a borrower group. In case of credit to infrastructure projects this
ceiling shall he enhanced to 20% in case of a single borrower and 50% in case
of a group.
[R5]The exposure ceiling limits applicable from 1.4.2002
is 15 percent of capital fund in case of single borrower and 40 percent in the
case of a borrower group. In case of credit to infrastructure projects this
ceiling shall he enhanced to 20% in case of a single borrower and 50% in case
of a group.
[R6]Circular No. DBOD. BP. BC. 82/21.04.048/00‑01,
dt. 26.2.2001.
[R7] As per RBI FIC
No. 85/01 02.00/95‑96 dt. 26.6. 1996