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Credit Facilities – Lending to REITs and InvITs and Acquisition Finance

Reserve Bank of India (RBI) has issued directions on credit facilities offered by various regulated entities. This article summarises the directions applicable to lending to Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) and acquisition finance. To whom are the directions applicable? The directions are applicable to the following Regulated Entities (REs) – Commercial Banks  Small Finance Banks (SFBs) All India Financial Institutions (AIFIs) regulated by RBI – Export Import Bank of India (EXIM Bank) National Bank for Agriculture and Rural Development (NABARD) National Housing Bank (NHB) Small Industries Development Bank of India (SIDBI) National Bank for Financing Infrastructure and Development (NaBFID) What are the directions on lending to REITs and InvITs? Lending to REITs (by commercial banks) Lending to InvITs (by commercial banks, SFBs and AIFIs) Banks shall be permitted to lend to REITs which are registered with...
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Transfer of Surplus by the RBI to the Government

The surplus payable by the Reserve Bank of India (RBI) to the Central Government for the financial year 2025-26 amounted to ₹2,86,588.46 crore.  Why does the RBI transfer the surplus amount to the Central Government? As per section 47 of the RBI Act, 1934, after making provision for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation funds and other provisions, the balance of the profits of the RBI is required to be paid to the Central Government. Also, the Central Government holds 100% of the share capital of the RBI. How much risk provision is required to be maintained by the RBI? The RBI developed the Economic Capital Framework (ECF) during 2014-15 and 2015-16 for determining the appropriate level of risk provisions to be made under the provisions of section 47 of the RBI Act, 1934.  In November 2018, the RBI, in consultation with the Government, constituted an Expert Committee to review the ECF of the RBI (Chairman: Dr. Bimal Jalan, fo...
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Highlights of RBI Annual Report 2025-26 – Chapter 7 to 12

Reserve Bank of India (RBI) has published its annual report for the financial year 2025-26. In a series of articles, we will go through the highlights of the report. This is the fifth and final article in the series.  Chapter 7 – Public Debt Management The ways and means advances (WMA) limit for the Government of India (GoI) for H1:2025-26 (April to September 2025) was fixed at ₹1,50,000 crore and for H2:2025-26 (October 2025 to March 2026) was fixed at ₹50,000 crore. The RBI entered into an agreement with the Government of National Capital Territory of Delhi (GNCTD), under Section 21A(1) of the RBI Act, 1934, to carry on the general banking business of GNCTD and manage its rupee public debt. The WMA limit of GNCTD was set at ₹890 crore, taking the aggregate WMA limit of all the states / UTs to ₹61,008 crore. The RBI introduced Separate Trading of Registered Interest and Principal of Securities (STRIPS) in the state government securities. Retail Direct Gilt (RDG) account – An au...
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Highlights of RBI Annual Report 2025-26 – Chapter 6 (Part II)

Reserve Bank of India (RBI) has published its annual report for the financial year 2025-26. In a series of articles, we will go through the highlights of the report. This is the fourth article in the series.  Chapter 6 – Regulation, Supervision and Financial Stability (Part II) Central Bank Digital Currency (CBDC) – User-level programmability was introduced in the retail segment of CBDC, enabling individual users to send programmable money to other individuals.  Multiple government agencies commenced pilots in various direct benefit transfer (DBT) schemes leveraging the programmability feature of CBDC. In Gujarat, Puducherry and Chandigarh, public distribution system (PDS) beneficiaries were credited food subsidy through programmable CBDC, redeemable for eligible commodities at fair price shops / identified merchants.  Bharat Interface for Money (BHIM) has been enabled to discover existing CBDC wallets.  On cross-border payments, the RBI signed a memorandum of unders...
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