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New norms for infrastructure bonds

New norms for infrastructure bonds

The RBI has allowed banks to extend loans up to Rs 10 lakh to individuals against long-term infrastructure bonds issued by them, thus easing loan norms for low-cost housing.

´In order to provide liquidity to retail investors in such bonds, it has been decided that banks can extend loans to individuals against long-term bonds issued by them,´ the RBI said in a notification. Such loans, the RBI said, should be subject to a ceiling and tenure of loan should be within the maturity period of the bonds. Banks are not permitted to lend against such bonds issued by other banks.

Earlier, the RBI had exempted long-term bonds raised by banks from mandatory regulatory norms like CRR and SLR if the money raised is used for funding of such projects.

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