Tag: RBI lending to REITs

CommercialLatest Stories

RBI to Permit Bank Lending to REITs with 10% Exposure Cap

NEW DELHI: The Reserve Bank of India (RBI) has suggested allowing commercial banks to extend loans to real estate investment trusts (REITs) that are registered and regulated by the Securities and Exchange Board of India (SEBI). A draft circular has been issued with a set of prudential conditions, including norms related to leverage and security. The new regulations are expected to take effect on July 1, 2026. The central bank indicated that a bank’s total exposure to REITs should not exceed 10% of its eligible capital base, within the overall prudential ceiling for commercial real estate (CRE) exposures. Additionally, banks…

IndustryLatest Stories

RBI May Permit Banks to Lend to REITs

MUMBAI: On Friday, the Reserve Bank of India proposed allowing banks to extend loans to Real Estate Investment Trusts (REITs) with specific prudential safeguards, aiming to enhance the financing pool for the real estate industry. REITs are investment vehicles that manage income-producing real estate, offering investors a way to earn a portion of the income without directly buying properties. Developed in India, REITs and Infrastructure Investment Trusts (InvITs) aim to liberate banks’ funds tied up in completed and operational real estate and infrastructure projects by refinancing these with pooled resources from institutional and retail investors. Initially, commercial banks were not…