In its Report on Trend and Progress of Banking in India 1999-2000, the RBI has said that it had embarked on a review of current practices regarding credit exposure limits."There are certain issues, which require further consideration. The first relates to the concept of `capital funds'; the second relates to the scope of the measurement of credit exposure, in particular, the coverage of non-fund and other off balance sheet exposures,while, the third relates to the level of exposure limit itself.

Taking into account the complexities involved, it has been decided to prepare a detailed discussion paper on the subject, which would inter-alia address issues relating to current practices in India vis-a-vis international best practices and the possible alternative approaches with pros and cons and other relevant aspects,"the report said. The RBI said that the discussion paper, which is expected to be finalised by December 2000, would be circulated among banks and based on the comments and suggestions on the issues and an interaction the with banks the RBI would take a final view on the approach that should be adopted with a view to making it effective from March 2002.