Current Affairs · Banking and Finance

The Reserve Bank of India (RBI) recently withdrew a 2016 circular limiting how much the banking system could lend to a single large corporate borrower. What was the main reason behind this decision?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1To enhance the profitability of state-owned banks
2To diversify the banks' portfolios and balance financial stability with growth✓
3To encourage foreign investments
4To reduce corporate defaults

Correct answer

To diversify the banks' portfolios and balance financial stability with growth

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