The Reserve Bank of India has amended its Commercial Banks Concentration Risk Management Directions to change how banks manage real estate concentration risk. The amendment deletes paragraph 94 in the exposure norms chapter and inserts a new paragraph 94A requiring each bank to set internal limits for its aggregate exposure to the real estate sector and sub-limits for different real estate exposure categories in line with its business model. The new rule also places a prudential ceiling on a bank’s aggregate exposure to real estate investment trusts, with the sub-limit capped at 10 percent of the bank’s eligible capital base. The changes take effect from October 1, 2026, or earlier if a bank adopts the Reserve Bank of India Commercial Banks Credit Facilities Third Amendment Directions, 2026 in full.
Reserve Bank of India2026-06-10
Reserve Bank of India requires banks to set internal real estate exposure limits and caps REIT exposure at 10 percent of eligible capital base
The Reserve Bank of India has amended its Commercial Banks Concentration Risk Management Directions on real estate concentration risk, deleting paragraph 94 and inserting paragraph 94A requiring banks to set internal aggregate and category-wise real estate exposure limits aligned with their business model. The amendment also introduces a prudential ceiling on aggregate exposure to real estate investment trusts, capping this at 10 percent of a bank’s eligible capital base, effective from October 1, 2026 or earlier upon full adoption of the related credit facilities amendment.