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…