RBI Opens Direct Bank Funding For REITs; Repo Rate Kept Unchanged At 5.25%

ENA Sectors 2026-02-06 14:48:46 New Delhi, Feb 6 (KNN) The Reserve Bank of India (RBI) on Friday announced that banks will now be permitted to lend directly to Real Estate Investment Trusts (REITs), marking a significant policy shift for the real estate and capital markets. RBI Governor Sanjay Malhotra said the move is intended to improve access to finance for the sector. Industry executives welcomed the decision, saying it would ease funding constraints for REITs. Anshuman Magazine, Chairman and CEO, India, South-East Asia, Middle East and Africa at CBRE, said the change would provide a major boost to REITs by enabling them to raise funds at relatively cheaper rates, reported ANI. He added that access to bank loans would reduce reliance on costlier borrowing routes and help create a more diversified and stable funding base. According to Magazine, REITs can now easily refinance existing higher-cost debt with more stable bank loans, improving their distributable cash flows. Shishir Baijal, Chairman and Managing Director, Knight Frank India, described the move as a positive step that would ease credit access and lower funding costs for REITs. Earlier, banks were largely restricted from lending directly to REITs, forcing them to depend on capital markets or structured borrowing arrangements. Experts said the revised framework is expected to improve financial flexibility and risk management for these trusts. Separately, the RBI said the Monetary Policy Committee has decided to keep the repo rate unchanged at 5.25 per cent and maintain a neutral policy stance, signalling a wait-and-watch approach amid global and domestic economic conditions. Industry bodies said the decision provides stability. Shekhar G Patel, President, CREDAI, said holding rates steady offers policy certainty at a time of global currency volatility, which is important for sustaining demand and investment sentiment in real estate. Samantak Das of JLL India said the move preserves stability in borrowing costs and supports consumer confidence. At a time when the government has placed special emphasis on the development of cities with a population of 5 lakh and above in its Union Budget, stable interest rates can provide a significant boost to Tier 2 and Tier 3 cities, said Parveen Jain, President, NAREDCO. However, Anuj Puri, Chairman, ANAROCK Group, said the decision would not significantly boost affordable housing demand, as many potential buyers are waiting for lower interest rates. He noted that while existing borrowers will not face higher EMIs, a rate cut could have encouraged more homebuyers to enter the market. (KNN Bureau) 45051 https://knnindia.co.in/news/newsdetails/sectors/rbi-opens-direct-bank-funding-for-reits-repo-rate-kept-unchanged-at-525 2026-02-06 14:48:46 knnindia.co.in RBI Opens Direct Bank Funding For REITs; Repo Rate Kept Unchanged At 5.25%