Source: BS
Why in News?
The Reserve Bank of India (RBI) has announced measures to enhance credit flow to small businesses and support the real estate sector, as part of its monetary policy initiatives to strengthen formal and last-mile lending.
Key Announcements
1. Enhanced Collateral-Free Loans for Small Businesses
- Limit doubled:
- From ₹10 lakh to ₹20 lakh (₹1 million to ₹2 million)
- Objective:
- Improve access to formal credit for micro and small enterprises
- Reduce dependence on informal lenders
- Support entrepreneurship and job creation
2. Bank Lending to REITs Permitted
- Banks allowed to lend to Real Estate Investment Trusts (REITs)
- Lending to be subject to prudential safeguards
- Aimed at:
- Strengthening the real estate financing ecosystem
- Improving liquidity and transparency in the sector
What are REITs?
Real Estate Investment Trusts (REITs) are regulated investment vehicles that own, operate, or finance income-generating real estate such as office parks, malls, warehouses, and hotels. They allow investors to earn returns from real estate without directly owning property.
