The Reserve Bank of India (RBI) is working on plan that will make banks to cut their exposure to the top listed companies by 10 per cent of their existing levels, a senior official source revealed.

The source said that the central bank was working on a plan to restrict cash credit and working capital lending by banks to big companies to 90 per cent of their current levels. For the 10 per cent, the top listed companies will be required to issue bonds that lenders will originally subscribe to.

The reported move will free up bank lending for more sectors and make sure a big volume of top quality bonds reach the corporate bond market, which is vital for financing the economy's fast growing infrastructure requirements.

Currently, the size of India's corporate bond market stands at an estimated of 11.8 per cent of the country's gross domestic product (GDP). It is lower than East Asia's average of 17.2 per cent. In Japan, the size of the corporate bond market has been estimated at 19.8 per cent of the country's GDP.

Moving ahead, the plan is to gradually bring bank financing down to between 10 per cent and 25 per cent of the total debt financing for the top listed companies in proportion to global practices.

The plan was discussed at the meeting of the Financial Stability Development Council, chaired by Finance Minister P Chidambaram, previous month. The council brings regulators of all financial sectors together to frame policies for capital market.