Summary of this article
RBI issues draft norms on REIT lending
Commercial banks may finance REITs with safeguards
InvIT lending rules proposed to be harmonised
The Reserve Bank of India (RBI) has released the draft amendment directions on lending to Real Estate Investment Trusts (REITs), and Infrastructure Investment Trusts (InvITs). The draft proposals were published on February 13, 2026, in accordance with the following regulatory measures as announced earlier in the Statement on Developmental and Regulatory Policies on February 6, 2026.
RBI has placed five draft directions for amendments in the public domain for comments. These include some proposed changes relating to credit facilities, concentration risk management, and financial statements and disclosures for commercial banks. Draft amendments have also been issued for small finance banks (SFBs) and All India Financial Institutions (AIFIs) regarding credit facilities.
These directions aim to make certain changes to the existing regulatory instructions to allow the banks and certain financial institutions to extend finance to REITs within a specified framework.
Proposal to Allow Banks to Lend to REITs
These draft directions have suggested allowing commercial banks to finance REITs. This would be subject to appropriate prudential safeguards, including regulatory limits on exposure to REITs.
A regulatory ceiling is a cap applied by the regulator to the amount of loans a bank can lend to a specific entity or category. Prudential safeguards are risk control measures aimed at ensuring that banks control their exposure within acceptable risk limits and are financially stable.
The proposed amendments to the credit facilities directions, concentration risk management directions, and financial statement presentation and disclosure norms are meant to include these safeguards in the regulatory framework applicable to commercial banks.
Harmonisation of Norms for InvITs
The draft directions further propose to make changes to the present guidelines relating to lending to InvITs. These guidelines are currently applicable for commercial banks, SFBs, and AIFIs.
The central bank has proposed to harmonise the prudential safeguards applicable to lending to InvITs with those proposed for REITs. The move is based on the similarity in organisational structure and risk profile between the two types of investment trusts.
Harmonisation in this context means bringing regulatory requirements closer so that similar entities would be subject to similar rules on exposure limits and risk management. This is to bring uniformity in the treatment of REITs and InvITs among regulated entities.
