What changed
- Paragraph 94 of Chapter V - Exposure Norms in RBI Directions 2025 is deleted.
- New paragraphs 94A are inserted, requiring banks to set internal limits for aggregate exposure to real estate sector and sub-limits for various sub-categories of real estate exposures.
- A prudential ceiling of 10% of eligible capital base is set for banks' aggregate exposure towards real estate investment trusts (REITs).
What it means for you
- Banks must manage concentration risk by setting internal limits and sub-limits for real estate exposures, ensuring they do not exceed the prudential ceiling for REITs.
- This will help prevent excessive exposure to real estate sector and mitigate potential risks to the banking system.
What you must do
- Review and update internal limits and sub-limits for real estate exposures in accordance with business model.
- Ensure compliance with the prudential ceiling of 10% of eligible capital base for aggregate exposure towards REITs.
- Monitor and report on real estate exposures as per RBI guidelines.
Who it affects
Commercial banks, Real estate sector, Banks' customers with real estate exposures
What is the prudential ceiling for banks' aggregate exposure towards REITs?
10% of eligible capital base.
When do the new Directions come into force?
October 1, 2026, or an earlier date if the directions contained in the Reserve Bank of India (Commercial Banks – Credit Facilities) Third Amendment Directions, 2026 are adopted by a bank in entirety.
What is the purpose of the new Directions?
To manage concentration risk by setting internal limits and sub-limits for real estate exposures and prevent excessive exposure to the real estate sector.