RBI To Allow Banks To Invest In REITs And InvITs
Big boost in investments funds that can be tapped by real estate and infrastructure investment trusts.
The Reserve Bank of India (RBI) on Thursday proposed to allow banks to invest in Real Estate Investment Trusts (REIT) and Infrastructure Investment Trusts (InvITs) following a request by market regulator Securities and Exchange Board of India (SEBI).
RBI said banks would be allowed to invest up to 20 percent of their net owned funds (NOF) in these instruments. Final guidelines will be issued by the end of May, said a statement by the central bank cum regulator.
Currently, banks can invest in equity-linked mutual funds, venture capital funds and equities within this limit. SEBI had asked the central bank to allow banks and financial institutions to invest in REITs and InvITs to boost institutional participation.
The RBI also enhanced the speed of National Electronic Funds Transfer. The NEFT cycle has been reduced to half hourly batches instead of hourly batches.
On rationalising the Merchant Discount Rate (MDR), the central bank said it is examining the issue based on feedback from all participants. Until the final guidelines are issued, the extant instruction on MDR for debit card transactions will continue, the RBI said.