Banks can give loans to retail investor against infra bonds: RBI

Maximum loan amount capped at Rs 10 lakh

Reserve Bank of India has allowed banks to give loans to individuals against investment in long-term bonds issued to raise money for lending to infrastructure and affordable housing projects.

The purpose for giving such loans is to provide liquidity to retail investors. Banks can give loans up to Rs 10 lakh per borrower. The tenure of loans should be within maturity period of bonds, RBI said in communication to banks.

Bank can lend against these bonds issued by it only. It is barred from lending against bonds issued by other banks.

The boards of the banks should lay down a policy prescribing suitable margins, purpose of the loan and safeguards, RBI added.

Banks can issue long-term bonds with a minimum maturity of seven years to raise resources for lending to long term projects in infrastructure and affordable housing.