The Reserve Bank of India (RBI) has decided to create a central repository of large borrowers (individuals and organisations) whose loans exceed Rs 10 crore. This new move comes barely a week after its new governor Raghuram Rajan had proposed the idea of keeping a regular tab on the large common exposures of banks to check the rising non-performing assets.

“It has been decided to use the information supplied by the banks through the Return on Large Borrowers (Form A), which captures system-wide exposure of individuals and entities having exposure (both fund and non-fund based) of more than Rs 10 crore, for creation of central repository of large credits across banks,” said the RBI on Wednesday.

With a central repository in place, banks and the regulator will be able to effectively monitor the lending activity and loan repayments of high amounts.

Warning the banks to exercise caution while submitting data, RBI said, “Banks are advised to take utmost care about the data accuracy and integrity, while submitting the data on large credit to the RBI, failing which penal action would be undertaken.”

The banking sector has been severely affected due to the slowdown in the economy which is affecting the loan recovery of banks. Since taking over charge, Rajan has been bringing in a series of measures to shield the banking system from financial risks.