The Presidents / Chief Executives
All Banks / DFIs

Dear Sirs / Madam,

PRUDENTIAL REGULATIONS FOR CORPORATE AND COMMERCIAL BANKING
REGULATION R-6(1B) 20% LIMIT ON INVESTMENT IN SHARES

Please refer to Para 1B of Regulation R-6 of Prudential Regulations for Corporate and Commercial Banking, wherein, banks and DFIs/Islamic Banks have been required to contain their aggregate exposure in shares at 20% and 35% respectively of their equity.

2. It has been decided to broaden the exposure in shares from the existing limit of 20% & 35% to 30% & 45% of the banks and DFIs/Islamic Banks’ equity, respectively, provided, their aggregate exposure, at any point of time, does not exceed the level of (i) 20% and 35% (for DFIs and Islamic Banks) of their equity in direct equity investment in ready/cash market, and (ii) 10% of their equity in future contracts. In this connection, the 10% exposure limit for future contracts will include both positions taken in futures buying and selling.

3. Other instructions on the subject will, however, remain unchanged.

4. Please acknowledge receipt