With bank lending now available, REITs may now have a diversified funding base, making them less vulnerable to capital market volatility.
FinTech BizNews Service
Mumbai, 6 February 2026: The Monetary Policy Committee (MPC) held its 59th meeting from February 4 to 6, 2026, under the chairmanship of Shri Sanjay Malhotra, Governor, Reserve Bank of India. The MPC members Dr. Nagesh Kumar, Shri Saugata Bhattacharya, Prof. Ram Singh, Dr. Poonam Gupta and Shri Indranil Bhattacharyya attended the meeting.
The RBI Governor today made a Statement on Developmental and Regulatory Policies. This Statement sets out various developmental and regulatory policy measures relating to (i) Regulations; (ii) Payments System; (iii) Financial Inclusion; (iv) Financial Markets; and (v) Capacity Building.
Amit Shetty, CEO, Embassy REIT, comments on RBI's move on bank lending to REITs:
"We commend RBI’s landmark move to allow banks to lend directly to REITs at the trust level. This policy step will enhance access to long-term, stable financing for REITs, complementing traditional capital market funding and broadening the financing ecosystem for income-producing real estate. It further validates the thesis that REITs are long-term capital structures of the highest credit quality, deserving of robust financing that banks can provide. This policy will help expand access to longer-term, competitive bank finance, which will support healthier balance sheets and stable growth by reducing the need for frequent refinancing. By having an array of bank lending options and the capital markets to fund their businesses and strategic objectives, REITs are poised to deliver greater growth and, ultimately, better returns to unitholders."
Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, explains:
"RBI Governor Sanjay Malhotra's announcement that banks are now permitted to lend directly to Real Estate Investment Trusts (REITs) is likely to be a major boost to these instruments, and make it easier for the trusts to raise funds at relatively cheaper rates. Banks were generally restricted from lending directly to the REITs and they had to borrow through their Special Purpose Vehicles (SPVs) or rely on issuing bonds and raising equity in the capital markets.
With bank lending now available, REITs may now have a diversified funding base, making them less vulnerable to capital market volatility. Moreover, they may now easily refinance existing higher-cost debt with more stable bank loans, improving their distributable cash flows.
Along with FM's announcement in Budget 2026 on including CPSE assets under the REIT structure, and their recent reclassification as 'equity-related', this asset class is poised to witness high growth in coming months."
