New Delhi: To boost participation in capital markets and enhance liquidity, the Reserve Bank of India (RBI) has raised the lending limit for financing Initial Public Offers (IPOs) from ₹10 lakh to ₹25 lakh per individual.
The central bank has also increased the limit for loans against shares (LAS) from ₹20 lakh to ₹1 crore.
RBI’s move is expected to encourage greater participation from high-net-worth individuals (HNIs) in equity markets and deepen engagement in the primary market. The higher limits will also apply to units of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).
“Loans against shares and IPO financing existed earlier but were not revised for many years. Updating these limits is a natural step,” said RBI Governor Sanjay Malhotra. The last revision of the LAS limit was in 1998; considering inflation, the RBI noted that this increase is modest.
The announcement comes at a time of heightened activity in the primary market, with major IPOs expected this year, including Reliance Jio, Tata Capital, and LG Electronics, likely benefiting from increased subscriptions from the HNI segment.
Additionally, the RBI has proposed removing the ceiling on lending against listed debt securities, providing banks greater flexibility to support investors. Norms for external commercial borrowings have also been relaxed to widen the base of borrowers and lenders.
The risk weights for NBFC infrastructure lending and housing finance have been lowered for ongoing projects, and licensing for new urban cooperative banks will resume after a hiatus of over two decades.
To simplify compliance, the RBI will consolidate over 250 regulatory instructions into master directions. Restrictions on transaction accounts have been eased, and exporters will be given extended timelines for repatriation from IFSC accounts.
The central bank has also allowed a six-month forex outlay for merchanting trade transactions, which involve shipments from one foreign country to another with an Indian intermediary, and permitted special rupee Vostro accounts for investment in corporate bonds and commercial papers.
Under the revised framework, the Integrated Ombudsman Scheme will now cover state and district cooperative banks.
These measures are expected to expand credit access, improve liquidity, and encourage wider participation in equity markets.
