Summary
The RBI has proposed draft rules allowing banks to lend to REITs, setting a cap at 10% of their capital base. Essentially, this move aims to boost transparency and structure in real estate lending, consequently improving capital flow into India’s property investment market.
Highlights
- Reserve Bank of India (RBI) has issued draft guidelines allowing banks to lend to Real Estate Investment Trusts (REITs) under a regulated framework.
- As per the proposal, banks can have exposure to REITs up to 10% of their eligible capital base, ensuring controlled risk management.
- The move aims to strengthen funding support for the real estate sector while maintaining financial stability in the banking system.
- RBI has invited public comments on the draft framework until March 6, after which it will issue final guidelines.
- The proposed norms are expected to improve transparency, structured lending, and capital flow into India’s real estate investment market.
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