RBI raises IPO financing limit to Rs 25 lakh, allows more loan against shares
&imwidth=600&imheight=450&format=webp&quality=medium "RBI raises IPO financing limit to Rs 25 lakh, allows more loan against shares")
Reserve Bank of India Governor Sanjay Malhotra Photograph: (ANI file)
Reserve Bank of India's new loan move: RBI intends to encourage greater participation of high-net-worth individuals (HNIs) in equity markets and deepen engagement in the primary market.
The Reserve Bank of India (RBI) has raised the lending limit for financing Initial Public Offers (IPOs) from Rs 10 lakh to Rs 25 lakh per individual. The decision was taken to boost capital markets participation and increase liquidity. Theapex bank has also increased the limit of loans provided against shares from Rs 20 lakh to Rs 1 crore.
With its decisions, the RBI intendsto encourage greater participation of high-net-worth individuals (HNIs) in equity markets and deepen engagement in the primary market.
"Loans against shares and IPO financing existed earlier, but were not revised for many years. It is only natural that these limits be updated," RBI Governor Sanjay Malhotra said.
The limit was last updated in 1998. The Reserve Bank of India further said that an increase in the loan limit isn't significant if one adjusts for inflation.
The central bank has also proposed to remove the ceiling on lending against listed debt securities, giving banks greater flexibility to support investors. External commercial borrowings norms have been relaxed to broaden the borrower and lender base.
Here are the other decisions RBI took.
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1.RBI has announced to consolidate over 250 regulatory instructions into master directions to reduce compliance costs.
2. RBI has allowed a six-month forex outlay for merchanting trade transactions.
3. TheIntegrated Ombudsman Scheme will now cover state and district cooperative banks.
Reserve Bank of India Governor Sanjay Malhotra said on Wednesday that there was no proposal to impose any charge on UPI transactions.
The RBI also said that the apex bank is examining a proposal to allow lending companies to lock mobile phones if buyers haven't made their EMI payments.