RBI finalizes bank lending rules for REITs, InvITs
The Reserve Bank of India has issued final amendment directions permitting commercial banks to extend finance to Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). This decision, announced today, follows a public consultation on draft guidelines issued in February.
New prudential framework for lending
The Reserve Bank of India (RBI) had previously issued draft Amendment Directions on February 13, 2026, proposing to allow commercial banks to provide finance to Real Estate Investment Trusts (REITs).
These proposals included the implementation of appropriate prudential safeguards, such as a regulatory ceiling on exposure to REITs, to ensure financial stability.
Concurrently, the existing guidelines governing lending to Infrastructure Investment Trusts (InvITs), which apply to commercial banks, small finance banks, and All India Financial Institutions, were slated for harmonisation with the new prudential safeguards established for REITs.
The RBI has now examined the feedback received from stakeholders on these draft directions and has incorporated suitable modifications into the final version.
Five amendment directions issued
To implement the new lending framework, the Reserve Bank of India has today issued five specific Amendment Directions.
These include updates to Credit Facilities for commercial banks, small finance banks, and All India Financial Institutions.
Further amendments address Concentration Risk Management and Prudential Norms on Capital Adequacy for commercial banks.
Notably, a proposed amendment to the Reserve Bank of India (Commercial Banks – Financial Statements: Presentation and Disclosures), 2025, has been deferred.
This deferral stems from upcoming changes to asset classes, effective April 1, 2027, under separate directions issued on April 27, 2026.