The Reserve Bank of India (RBI) published draft amendment directions for public comment that would permit commercial banks to extend finance to Real Estate Investment Trusts (REITs), subject to prudential safeguards including a regulatory ceiling on exposures to REITs. The package also proposes to harmonise existing guidance on lending to Infrastructure Investment Trusts (InvITs) to align it with the safeguards proposed for REIT lending. The draft changes span multiple RBI directions, including amendments to the Commercial Banks credit facilities framework, concentration risk management requirements, and financial statements presentation and disclosure directions, as well as corresponding amendments covering Small Finance Banks and All India Financial Institutions for credit facilities. The RBI frames the harmonisation for InvITs as a parity measure reflecting similarities in organisational structure and risk. Comments from regulated entities and other stakeholders are due by March 6, 2026 via the RBI’s ‘Connect 2 Regulate’ portal or by email, referencing the full name of the relevant draft amendment directions in the subject line.
Reserve Bank of India 2026-02-13
Reserve Bank of India consults on permitting commercial bank lending to REITs and aligning InvIT prudential safeguards
The Reserve Bank of India released draft amendment directions for public comment, proposing that commercial banks be allowed to finance Real Estate Investment Trusts (REITs) under prudential safeguards, including a regulatory ceiling on exposures. The amendments also aim to harmonize lending guidance for Infrastructure Investment Trusts (InvITs) with these safeguards, with comments due by March 6, 2026.