RBI raises loan limits for small businesses, backs REIT lending

The Reserve Bank of India (RBI) on Friday (February 6, 2026) announced measures to ​boost credit to small businesses and the real ‌estate sector to improve access to ​formal financing and strengthen last-mile lending.

The Reserve Bank of India proposed doubling the limit on collateral-free loans for small enterprises to ₹2 million ($22,170.49) from ₹1 million ($11,085.25).

The revised norms will apply to loans sanctioned or renewed from April 1, 2026.

The Reserve Bank of ​India also said banks would be allowed to ⁠lend to real estate investment trusts under prudential safeguards, extending a facility already available to infrastructure investment trusts. Real Estate Investment Trusts (REITs) own and manage income-generating ​assets such as offices and ⁠malls. India’s markets regulator recently allowed them to be treated as equity, opening the door to mutual fund investments.

Shares of Mindspace Business Parks REIT rose ‌0.9% to lead listed trusts, while Brookfield India ‌Real Estate Trust gained 0.2% and Nexus Select Trust advanced 0.5% in afternoon trade. The broader benchmarks ‍were mixed in afternoon trade, clawing back some of their losses after the central bank kept rates unchanged as ‍expected on Friday (February 6, 2026).

“Upon review and considering the presence of strong regulatory and governance framework for listed REITs, it is proposed to permit commercial banks to extend finance to REITs, subject to appropriate prudential safeguards,” the RBI said in a statement.

The existing guidelines are being aligned to match “prudential safeguards” proposed for lending to REITs, it ⁠added, and once made effective, could spur fresh funding into property assets and stoke the growth ​of the sector.

“This policy will help expand access ⁠to longer-term, competitive bank finance, which will support healthier balance sheets and stable growth by reducing the need for frequent refinancing,” Amit Shetty, chief executive of Embassy Office Parks REIT said.