April 18, 2017
All Scheduled Commercial Banks
Dear Sir/ Madam,
Prudential Guidelines – Banks’ investment in units of REITs and InvITs
Please refer to the paragraph 12 of the Statement on Developmental and Regulatory Policies (extract enclosed) issued by RBI on April 06, 2017. As indicated therein, it has been decided to allow banks to participate in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) within the overall ceiling of 20 per cent of their net worth permitted for direct investments in shares, convertible bonds/ debentures, units of equity-oriented mutual funds and exposures to Venture Capital Funds (VCFs) [both registered and unregistered], subject to the following conditions:
(R. K. Moolchandani)
Encl: as above
Extract (Paragraph 12) of Statement on Developmental and Regulatory Policies, Reserve Bank of India – issued on April 6, 2017 Real Estate Investment Trust (REITS) and Infrastructure Investment Trust (InvITs): Banks’ Participation – The Securities and Exchange Board of India (SEBI) has put in place regulations for REITS and InvITs and requested the Reserve Bank to allow banks to participate in these schemes. Currently, banks are allowed to invest in equity-linked mutual funds, venture capital funds (VCFs) and equities to the extent of 20 percent of their NOF. It is proposed to allow banks to invest in REITs and InvITs within this umbrella limit. Detailed guidelines will be issued by end-May 2017.