Mumbai . The Reserve Bank of India (RBI) on Wednesday announced several decisions, making credit easier for companies and common investors. After the Monetary Policy Committee (MPC) meeting, Governor Sanjay Malhotra said that the RBI will create a framework, with the help of which banks will be able to provide loans to companies for acquisitions.
This step has been taken by the State Bank of India after requesting the regulator to allow such funding.
Malhotra further said that the central bank has removed the regulatory limit of lending on listed loans securities.
Also, the limit of lending on shares has been increased from Rs 20 lakh to Rs 1 crore per person.
For IPO funding, the limit has been increased from Rs 10 lakh to Rs 25 lakh per person.
This change will help individually apply to individuals (HNI) with high net worth in public outputs for large amount.
The RBI has also decided to make loans cheaper for infrastructure projects. This will reduce the risk load on loans given by non-banking financial companies (NBFCs) to high-quality infrastructure projects.
In addition, the regulator has withdrawn the 2016 rule that discouraged loans to large borrowers with bank loans over Rs 10,000 crore. This is expected to increase overall debt availability in the system.
Experts stated that RBI’s decisions aim to encourage more loans by banks, support corporate acquisitions, promote IPO participation and to make the availability of funds more facilitated for infrastructure and commercial development.
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The central bank has decided to allow banks for funding for acquisition by Indian companies, as well as restrictions on loans in lieu of shares and loans securities.