Views on the impact assessment of RBI`s draft guidelines on REITs/InvITs financing by Ms. Rajashree Murkute, Senior Director and Mr. Maulesh Desai, Director CareEdge Ratings
The Reserve Bank of India (RBI) has issued draft second amendment directions, 2026, for lending to Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) by Commercial Banks. CareEdge Ratings view on the same is given below.
Ms. Rajashree Murkute, Senior Director at CareEdge Ratings , stated that the RBI’s draft framework permitting commercial banks to extend credit to listed REITs is a significant step toward enhancing funding access for the sector at more competitive rates. She noted that the move will also enable banks to diversify into stable, income-backed credit exposures.
She further highlighted that the proposal to introduce a comprehensive REIT/InvIT Lending Policy, covering appraisal and underwriting standards, DSCR benchmarks, internal single borrower, and portfolio exposure limits, along with monitoring and covenant mechanisms would support stronger governance and risk management practices across the ecosystem. Ms. Murkute added that the restriction on debt structures involving bullet or ballooning principal repayments is a welcome measure for InvITs with underlying assets operating under fixed-term concessions, as it helps mitigate refinancing risks. However, she observed that such restrictions may adversely impact investor returns (IRR) especially for REITs and InvITs with long-tenor or perpetual asset classes such as warehousing, transmission towers, and telecom towers.
Mr. Maulesh Desai, Director CareEdge Ratings said the stringent eligibility criteria, such as the requirement of a minimum three-year operational history for REITs and InvITs seeking bank funding; could limit bank participation in the early stages of formation, despite the strong creditworthiness that many of these entities demonstrate.
As of March 31, 2025, the total debt across InvITs and their SPVs stood at Rs 2.81 lakh crore, with banks accounting for nearly 60% of this exposure, underscoring the critical role of banking sector participation in the continued growth and stability of the InvIT ecosystem. In this backdrop, how the final policy evolves will be an important monitorable, says Mr. Desai.
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