RBI Raises Loan Limits, Effective Oct 1

The Reserve Bank of India announced a package to improve credit flow, raising the ceiling on loans against shares from Rs 20 lakh to Rs 1 crore per person and increasing IPO financing limits from Rs 10 lakh to Rs 25 lakh, effective Oct 1, 2024. It also removed the regulatory ceiling on loans against listed debt securities and introduced an enabling framework permitting banks to finance acquisitions by Indian corporates. The RBI will lower risk weights on NBFC lending to high‑quality infrastructure projects and withdrew a 2016 rule that discouraged lending to very large borrowers with bank exposure above Rs 10,000 crore. Implementation of the expected credit loss framework and the Basel III capital norms has been pushed out to 2027 to give banks more time to adjust. The monetary policy committee left the repo rate unchanged and revised forecasts, raising GDP growth to 6.8% and lowering consumer price inflation to 2.6% for the current year. Regulators and market participants expect the measures to broaden borrowing options, encourage bank participation in deal and IPO financing, and support overall credit availability.