Mumbai buzzed with financial anticipation as RBI Governor Sanjay Malhotra announced a landmark proposal enabling commercial banks to provide loans to Real Estate Investment Trusts (REITs). Prudential safeguards will underpin this expansion, announced on February 6.
The rationale is clear: listed REITs have matured under a fortified regulatory regime. ‘After thorough review, we’re proposing bank funding with appropriate measures,’ Malhotra said, pointing to parallels with InvIT lending frameworks.
REITs emerged to liberate bank capital locked in ready realty and infra assets, redirecting institutional and retail investments. While InvITs opened to bank loans progressively, REITs stayed insulated— a stance now evolving.
Draft circulars, harmonized with InvIT norms, are slated for public discourse soon, ensuring risk-managed growth.
The reform wave extends to gold loan NBFCs, relieving ICCs with 1,000+ branches from pre-approval hurdles for new sites. Urban cooperative banks receive operational and lending boosts too.
This proactive stance by the RBI could catalyze a surge in real estate investments, enhancing market depth and efficiency. With India’s urbanization accelerating, such policies are timely catalysts for sustainable development.