Key Highlights
- IPO financing limit raised: from Rs.10 lakh to Rs.25 lakh per individual.
- Loans against shares: limit hiked from Rs.20 lakh to Rs.1 crore.
- Applies to REITs and InvITs as well.
- No ceiling on lending against listed debt securities proposed.
- Multiple easings: ECB norms, merchanting trade forex outlay, IFSC export repatriation timeline.
- Governance: 250+ circulars to be consolidated into Master Directions.
- Ombudsman cover extended to state and district cooperative banks.
RBI Hikes IPO Financing and LAS Limits
The Reserve Bank of India has increased funding limits to deepen market participation and liquidity.
| Facility | Earlier Limit | New Limit |
|---|---|---|
| IPO Financing (per individual) | Rs.10 lakh | Rs.25 lakh |
| Loans Against Shares (LAS) | Rs.20 lakh | Rs.1 crore |
Higher limits also apply to units of REITs and InvITs. The last LAS limit revision was in 1998. Considering inflation, the RBI noted the earlier cap was outdated.
Why It Matters
- Supports HNI participation in primary and secondary markets.
- Could boost demand in upcoming IPOs such as Reliance Jio, Tata Capital, and LG Electronics.
- Enhances market liquidity and depth.
Other Regulatory Easing
- Proposed removal of the lending ceiling against listed debt securities.
- External Commercial Borrowings norms relaxed to widen borrower and lender base.
- Risk weights lowered for NBFC infrastructure lending and housing finance on operational projects.
- Licensing for new urban cooperative banks to resume after over two decades.
- Over 250 regulatory instructions to be consolidated into Master Directions to cut compliance costs.
- Restrictions eased on transaction accounts.
- Exporters get extended timelines for repatriation from IFSC accounts.
- Allowed a six-month forex outlay for merchanting trade transactions.
- Special Rupee Vostro Accounts can invest in corporate bonds and commercial papers.
- The Integrated Ombudsman Scheme now covers state and district cooperative banks.
What RBI Said
“Loans against shares and IPO financing existed earlier, but were not revised for many years. It is only natural that these limits be updated,” said RBI Governor Sanjay Malhotra.
Investor Takeaway
- Check revised limits with your bank or broker before applying.
- Use financing prudently. Assess risk and repayment capacity.
- Expect smoother processes as regulations get consolidated.
Note: These measures aim to expand credit access and encourage wider participation in equity markets. Except for the headline, the original syndicated story was not edited by Asianet Newsable English staff.
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