RBI proposes higher lending limits against shares, IPOs
[hfe_template id='11223']
[ad_1]
The Reserve Bank of India has proposed sweeping changes to expand banks’ role in capital market lending. The central bank has proposed removing the regulatory ceiling on loans against listed securities and raising the individual lending limit from Rs 20 lakh to Rs 1 crore. It has also proposed enhancing IPO financing limits from Rs 10 lakh to Rs 25 lakh per borrower. The measures are aimed at deepening credit flows to capital markets, while allowing banks greater flexibility in lending practices. “It is proposed to remove the regulatory ceiling on lending against listed debt securities and enhance limits for lending by banks against shares from Rs 20 lakh to Rs 1 crore and for IPO financing from Rs 10 lakh to Rs 25 lakh per person,” RBI governor Sanjay Malhotra RBI said during the monetary policy announcement. LAS allows borrowers to pledge their financial investments such as shares, bonds, or mutual funds in exchange for credit, while re...