Need cash? Now borrow up to ₹1 crore against your shares, says RBI

In a bid to deepen credit access for investors, the Reserve Bank of India (RBI) has raised the ceiling on loans against shares. From October 1, 2025, individuals can now avail up to ₹1 crore by pledging their listed shares—up from the earlier limit of ₹20 lakh. At the same time, the limit for IPO financing (loans to subscribe to new share issues) has been raised from ₹10 lakh to ₹25 lakh. 

 

The announcement was made by RBI Governor Sanjay Malhotra today after the Monetary Policy Committee meeting earlier this week.

 

If you own shares or mutual funds but want to avoid redeeming them, you can access emergency funds by pledging your investments. Pledging lets you use assets like stocks, mutual funds, or other securities as collateral to obtain a loan from a financial institution or lender.

 

 

Explaining the changes, Malhotra  said, “It is proposed to remove the regulatory ceiling on lending against listed debt securities and enhance limits for lending by banks against shares from Rs 20 lakh to Rs1 crore, and for IPO financing from Rs 10 lakh to Rs 25 lakh per person.”

 

What does “loan against shares” mean?

 

When you need money but don’t want to sell your shares, you can pledge them as collateral to a bank or broker. In return, you get a loan—usually at lower interest rates than personal loans.

 

Example: You own shares worth ₹50 lakh. Earlier, you could borrow only ₹20 lakh against them. Now, depending on the lender’s margin rules, you might be able to borrow up to ₹1 crore.

 

This allows you to meet expenses or invest further without losing ownership of your portfolio.

 

Why this change might matter to you

 

More breathing room without selling

Suppose you hold a well-performing portfolio and face a cash crunch—maybe for education, medical needs, or an entrepreneurial venture. Previously, you could only borrow up to ₹20 lakh against your shares. Now, with the ₹1 crore limit, there’s significantly more flexibility to access capital without liquidating your investments.

 

Better IPO participation

IPOs often require large capital upfront. With the new ₹25 lakh financing limit, more investors might participate in promising new listings, leveraging their existing portfolios to bid for new stocks without needing full cash in hand.

 

What has changed with IPO financing?

 

IPO financing is when investors borrow to apply for IPOs.

 

Old limit: ₹10 lakh

 

New limit: ₹25 lakh

 

This means you can now apply for bigger IPO allocations using borrowed money. But remember—if the IPO isn’t allotted or the stock underperforms, you’ll still need to repay the loan with interest.

 

What about debt securities?

 

RBI has also removed restrictions on lending against listed debt securities like corporate bonds, government securities, or debentures. This expands the pool of assets investors can use to borrow against, making loans more flexible.

 

Risks to watch

• Margin calls & volatility: If your pledged stocks fall in value, your lender may issue a margin call demanding more collateral or partial sell-off.

• Interest costs: Even though pledging shares often comes with better interest rates than personal loans, fees and charges can add up—especially if the repayment period extends.

 

What you should do now

 

Check with your broker or bank whether they now offer the revised loan limits against shares and IPO financing.

 

Understand the terms & interest rates before pledging—compare across institutions.

 

Use the borrowed amount judiciously—primarily for high-return or urgent needs, not for speculative plays.

 

Keep track of the collateral-to-loan ratio and be ready for margin calls.

 

If you’re an IPO investor, this might be your chance to subscribe to high-potential issues without fully deploying your cash.