RBI Draft Norms on Bank Lending to REITs from July 1
Why in the news
RBI drafted rules to permit bank credit to REITs, with safeguards on risk and fund use.
Key facts
- Eligible borrowers: only SEBI-registered REITs.
- Proposed date: July 1.
- Exposure cap: total bank lending up to 49% of asset value (as on 31 March of the previous financial year).
- Security: fully secured through a mortgage on identified assets.
- Monitoring: banks must closely track end-use of funds.
About REITs
- Vehicles owning or financing income-producing property, so investors earn without buying it.
- Assets: offices, malls, warehouses, hotels, hospitals, data centres.
Exam angle
- Draft issued by: RBI.
- Cap figure: 49% of asset value.