RBI to Allow Bank Loans to REITs by July 1, Capping Exposure at 49%

• RBI proposes allowing banks to extend loans to listed Real Estate Investment Trusts (REITs) by July 1, 2026.
• Total bank exposure to a REIT and its underlying entities will be capped at 49% of the REIT's asset value.
• Only listed REITs with a minimum of three years of operations and no adverse regulatory action will be eligible.
• Banks must strictly monitor the end-use of funds to prevent financing of unpermitted activities like land acquisition.
• The move aims to free up bank funds by refinancing real estate projects, similar to existing InvIT lending.