RBI Rule on Lending Causing Headaches for Indian Banks

Imagine banks have a rule about how much they can lend to big companies.

The rule says they can't lend too much to one company or a group of companies.

The problem is, even if a bank promises a loan but the company hasn't used the money yet, the bank still has to count it as if it was lent.

This means some banks are reaching the limit and can't lend more, even if companies need it.

Banks want the rule changed, but the RBI says it's important to keep the rules the same.

This is because RBI wants companies to get money from other places, like bonds, not just banks.