RBI Permits Loan Against Long Term Infrastructure Bonds

Business

oi-Sneha

By Sneha B K

Published: Thursday, November 27, 2014, 14:16 [IST]

The Reserve Bank of India (RBI) on Thursday extend loans to individuals against long-term infrastructure bonds. The move came in order to provide liquidity to retail investors in such bonds.

RBI said that such loans should be subject to a ceiling, say, Rs.10 lakh per borrower, and tenure of loan should be within the maturity period of the bonds.

The Reserve bank also clarified that banks are not permitted to lend against such bonds issued by other banks.

In July, the RBI exempted long-term bonds from mandatory regulatory norms such as CRR and SLR if the money raised is used for funding of such projects.

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