Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Industry / RBI caps bank exposure to REITs, InvITs at 10%
BackBack

RBI caps bank exposure to REITs, InvITs at 10%

RBI says banks' exposure to REITs/InvITs will be within the overall ceiling of 20% of the net worth permitted for direct investments in shares, convertible bonds/ debentures, VCFs

RBI’s move aims to help revive the cash-starved infrastructure sector. Photo: MintPremium
RBI’s move aims to help revive the cash-starved infrastructure sector. Photo: Mint

Mumbai: The RBI on Tuesday permitted banks to invest up to 10% of the unit capital of an Real Estate Investment Trust (REITs) or Infrastructure Investment Trusts (InvITs).

The banks’ exposure to REITs/InvITs will be within the overall ceiling of 20% of the net worth permitted for direct investments in shares, convertible bonds/ debentures, units of equity-oriented mutual funds and Venture Capital Funds (VCFs).

“Banks should put in place a Board approved policy on exposures to REITs/ InvITs which lays down an internal limit on such investments within the overall exposure limits in respect of the real estate sector and infrastructure sector," the Reserve Bank said while issuing prudential guidelines in this regard.

It further said banks will not invest more than 10% of the unit capital of an REIT/ InvIT.

In addition, banks will have to ensure adherence to the prudential guidelines on equity investments, classification and valuation of investment portfolio, Basel III Capital requirements for commercial real estate exposures and large exposure framework. In its first bimonthly monetary policy of 2017-18, the RBI had permitted banks to invest in REITs and InvITs.

The move was aimed to help revive the cash-starved infrastructure sector.

The Securities and Exchange Board of India (Sebi) has put in place regulations for REITs and InvITs and requested the RBI to allow banks to participate in these schemes.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 18 Apr 2017, 07:27 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App