+
RBI permitting banks to lend to InvITs positive
Real Estate

RBI permitting banks to lend to InvITs positive

The Reserve Bank of India (RBI) recently issued a notification on lending by banks to Infrastructure Investment Trusts (InvITs). While earlier, RBI had permitted banks to invest in units of InvITs, in the absence of clarity on lending to InvITs banks were reluctant to extend credit facilities to InvITs. Thus, despite strong credit profiles, InvITs had limited avenues of raising debt. Through the new notification, RBI has permitted banks to lend to InvITs subject to certain conditions. In ICRA’s view, this clarity will help improve debt availability for InvITs and pave the way for increased InvIT issuance by infrastructure players.

According to Shubham Jain, Senior Vice-President and Group Head, Corporate Ratings, ICRA, “InvIT is a very promising vehicle for the infrastructure sector and helps to channel long-term investment into the sector. Over the years, the regulators—SEBI and RBI—have taken multiple steps to strengthen the regulatory framework while facilitating the genuine challenges faced by the InvITs. Now, with the availability of bank debt financing, InvIT issuances can further gain prominence. This can help unlock the capital of developers deployed in operational projects and improve the overall fund availability for the infrastructure sector.”

The RBI’s permission for a bank lending to InvITs is subject to the bank’s board approval of a policy on exposures to InvITs, detailed assessment of the critical parameters of the InvIT and the underlying SPVs before lending, as well as monitoring performance of the underlying SPVs on an ongoing basis. Further, banks can lend only to those InvITs where none of the underlying SPVs is facing financial difficulty with its existing bank loans. RBI has also asked banks to take into consideration the legal provisions for enforcement of security while lending to InvITs. Further, RBI has permitted banks to provide debt to InvITs for acquisition of infrastructure companies provided they meet the conditions stipulated for financing promoter’s equity.

So far, five InvITs have raised funds—IRB InvIT Fund, India Grid Trust, IndInfravit Trust, India Infrastructure Trust and Oriental InfraTrust—of which two were publicly offered while three were privately placed. These InvITs have together raised over $ 2 billion from investors, including pension funds and long-term investors like CPPIB, Allianz Capital, OMERS, GIC, Brookfield and Asian Infrastructure Investment Bank. The potential of InvITs is much larger with sizeable operational infrastructure assets in the country.

Your next big infra connection is waiting at RAHSTA 2025 – Asia’s Biggest Roads & Highways Expo, Jio World Convention Centre, Mumbai. Don’t miss out!

The Reserve Bank of India (RBI) recently issued a notification on lending by banks to Infrastructure Investment Trusts (InvITs). While earlier, RBI had permitted banks to invest in units of InvITs, in the absence of clarity on lending to InvITs banks were reluctant to extend credit facilities to InvITs. Thus, despite strong credit profiles, InvITs had limited avenues of raising debt. Through the new notification, RBI has permitted banks to lend to InvITs subject to certain conditions. In ICRA’s view, this clarity will help improve debt availability for InvITs and pave the way for increased InvIT issuance by infrastructure players. According to Shubham Jain, Senior Vice-President and Group Head, Corporate Ratings, ICRA, “InvIT is a very promising vehicle for the infrastructure sector and helps to channel long-term investment into the sector. Over the years, the regulators—SEBI and RBI—have taken multiple steps to strengthen the regulatory framework while facilitating the genuine challenges faced by the InvITs. Now, with the availability of bank debt financing, InvIT issuances can further gain prominence. This can help unlock the capital of developers deployed in operational projects and improve the overall fund availability for the infrastructure sector.” The RBI’s permission for a bank lending to InvITs is subject to the bank’s board approval of a policy on exposures to InvITs, detailed assessment of the critical parameters of the InvIT and the underlying SPVs before lending, as well as monitoring performance of the underlying SPVs on an ongoing basis. Further, banks can lend only to those InvITs where none of the underlying SPVs is facing financial difficulty with its existing bank loans. RBI has also asked banks to take into consideration the legal provisions for enforcement of security while lending to InvITs. Further, RBI has permitted banks to provide debt to InvITs for acquisition of infrastructure companies provided they meet the conditions stipulated for financing promoter’s equity. So far, five InvITs have raised funds—IRB InvIT Fund, India Grid Trust, IndInfravit Trust, India Infrastructure Trust and Oriental InfraTrust—of which two were publicly offered while three were privately placed. These InvITs have together raised over $ 2 billion from investors, including pension funds and long-term investors like CPPIB, Allianz Capital, OMERS, GIC, Brookfield and Asian Infrastructure Investment Bank. The potential of InvITs is much larger with sizeable operational infrastructure assets in the country.

Next Story
Real Estate

Mumbai Records 11,230 Property Deals in August 2025

Mumbai’s property market remained resilient in August 2025, with 11,230 property registrations recorded under the Brihanmumbai Municipal Corporation (BMC) jurisdiction, according to data released by Knight Frank India. While this marks a 3 per cent year-on-year (YoY) decline compared to 11,631 registrations in August 2024, activity stayed robust despite the marginal dip.On a month-on-month (MoM) basis, registrations fell 11 per cent from 12,579 deals in July 2025, indicating seasonal moderation. However, the city’s stamp duty collections still reached Rs 10 billion, reflecting a 6 per cent..

Next Story
Infrastructure Transport

68 Jammu-Katra Trains Cancelled Amid Rain Damage

Jammu and Katra railway services remain severely affected as Northern Railway announced the cancellation of 68 trains—both incoming and outgoing—until 30 September, due to extensive track damage caused by heavy rains and flash floods. Meanwhile, 24 trains are scheduled to resume operations gradually.The Jammu railway division has experienced a complete halt in services for the past eight days, following track misalignment and breaches at several points along the Pathankot–Jammu section. Torrential rainfall since 26 August led to widespread flooding and damage, stranding hundreds of passe..

Next Story
Infrastructure Transport

Bangalore Metro MD Reviews Reach 6 and Phase 2A Progress

Bangalore Metro Rail Corporation Limited (BMRCL) Managing Director, Dr J Ravishankar, IAS, conducted inspections of key metro corridors on 29 and 30 August, reviewing the progress of Reach 6 (Pink Line) and Phase 2A (Blue Line).On 30 August, the inspection covered Reach 6, a 21.39-km corridor stretching from Kalena Agrahara to Nagawara, with 18 stations. This stretch is part of Phase 2 of the Bangalore Metro project. Dr Ravishankar assessed the status of civil works, finishing, track laying, and system integration between Kalena Agrahara and MG Road.Earlier, on 29 August, the MD inspected Phas..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?