In a major move, the Reserve Bank of India (RBI) has raised the IPO financing limit for individuals from ₹10 lakh to ₹25 lakh. The announcement was made by Governor Sanjay Malhotra in the central bank’s monetary policy statement on Wednesday.
The governor also proposed removing the regulatory ceiling on lending against listed debt securities and raising the limit for bank lending against shares from ₹20 lakh to ₹1 crore.
These steps are part of five measures aimed at enhancing the flow of credit. Among them, Malhotra also proposed creating an enabling framework for Indian banks to finance acquisitions by domestic corporates.
Further, the RBI plans to withdraw the 2016 framework that disincentivised lending to specified borrowers with banking system credit limits of ₹10,000 crore and above. While the Large Exposure Framework addresses concentration risks at the bank level, system-wide risks will, when required, be managed through macroprudential tools, the governor said.
To reduce the cost of infrastructure financing by NBFCs, the RBI has proposed lowering risk weights on their lending to operational, high-quality infrastructure projects.
In another significant move, the regulator has also decided to grant fresh licences to Urban Co-operative Banks (UCBs), with licensing paused since 2004.
“Considering the positive developments in the sector over the last two decades and in response to growing demand from stakeholders, we propose to publish a discussion paper on licensing of new UCBs,” Malhotra said.