The Reserve Bank of India has proposed permitting banks to extend loans to Real Estate Investment Trusts (REITs) from July 2026, capped at 49% of a trust’s asset value. The framework applies only to SEBI-registered, listed REITs with a minimum three-year operational track record.
The draft guidelines mandate strict monitoring of fund usage, prohibit lending for land acquisition, and disallow bullet or balloon repayment structures, aligning REIT lending norms with existing InvIT regulations. This marks a structural shift from earlier restrictions on bank exposure to real estate-linked vehicles. The proposed regime is expected to improve access to lower-cost institutional debt, enhance capital stack flexibility, and strengthen balance sheet efficiency across income-generating real estate portfolios, supporting sustained institutional investor participation.
Source: Times of India