The Reserve Bank of India (RBI) on Wednesday issued the Third Amendment Directions, 2026, laying down a detailed framework for bank lending to Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) while strengthening risk and exposure norms.The final guidelines follow a draft framework released by the central bank in February this year and will come into force from October 1, 2026, although banks have been allowed to adopt the new norms earlier if implemented in their entirety.
Under the revised framework, banks will be permitted to lend only to SEBI-registered and regulated REITs and InvITs that meet specific operational criteria.
For REITs, lending will be restricted to listed trusts where at least 80% of assets comprise cash-generating properties that have been operational for more than one year. Similarly, banks may lend only to listed InvITs with at least 80% of assets invested in completed and revenue-generating infrastructure projects.The RBI has also imposed exposure limits to prevent excessive concentration. Aggregate bank exposure to a REIT or InvIT, along with its special purpose vehicles (SPVs) and holding companies, has been capped at 49% of the value of the underlying assets.In another key safeguard, the central bank has mandated that all financing extended to REITs and InvITs must be fully secured. It has also prohibited bullet and balloon repayment structures, requiring loans to follow a structured repayment schedule instead.The directions require banks to formulate board-approved policies governing lending to REITs and InvITs, reinforcing internal oversight and risk management practices.Also Read: RBI seeks comments on draft amendments to standardised approach for counterparty credit riskFor InvIT-related loans that do not comply with the revised framework, the RBI has provided transition relief, allowing existing facilities to continue until maturity.The central bank has also updated its regulatory nomenclature, renaming provisions relating to lending to the real estate and infrastructure sectors to explicitly include REITs and InvITs.The move is expected to bring greater clarity and consistency to bank financing of investment trusts while aligning lending practices with the evolving scale and maturity of India’s real estate and infrastructure investment ecosystem.
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