New Delhi: Banks have urged the Reserve Bank of India (RBI) to ease the proposed lending norms for infrastructure investment trusts (InvITs), arguing that a mandatory three-year operational track record could slow infrastructure monetisation and choke fresh project financing, said people familiar with the discussions.
Lenders have asked the banking regulator to link eligibility for financing to the quality of underlying assets rather than the age of the InvIT, contending that the proposed requirement creates an unnecessary entry barrier for newly formed trusts holding operational assets.
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"We have brought this to the attention of the RBI and said that this entry barrier can also lead to delay in new infra projects being shifted to InvITs and thus impact fresh sanctions," a bank executive said on condition of anonymity, adding that the concerns were flagged to the regulator in April.
In March, the RBI notified the Reserve Bank of India (Commercial Banks - Credit Facilities) Amendment Directions, 2026 (Revised), according to which banks can lend to both real estate investment trusts (REITs) and InvITs which are listed, have completed three years of operations and have not faced any adverse regulatory action in the past three years. The directions are to be implemented from July 1.
An industry executive said that if InvITs are not able to access cheaper credit, their asset acquisition would also be impacted. "The RBI has set the same standards for both REITs and InvITs, when both are different," he added. As per the latest government data, asset monetisation through InvITs and REITs has unlocked more than ₹1.5 lakh crore, recycling funds into new projects and attracting global investors.
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According to a recent report by ratings agency Crisil, assets under management of road sector InvITs are likely to increase 30% to ₹3.9 lakh crore by the end of this financial year.
"The growth will be fuelled by monetisation of toll road assets by the National Highways Authority of India (NHAI) and continued traction in hybrid annuity model (HAM) asset sales by road developers," it said.
Earlier this month, the Securities and Exchange Board of India issued a circular stating that InvITs can use fresh borrowings exceeding 49% of their asset value for capital expenditure aimed at enhancing asset performance or augmenting capacity.
Lenders have asked the banking regulator to link eligibility for financing to the quality of underlying assets rather than the age of the InvIT, contending that the proposed requirement creates an unnecessary entry barrier for newly formed trusts holding operational assets.
Also read: Banks eye loans against mutual funds to tap young customers
"We have brought this to the attention of the RBI and said that this entry barrier can also lead to delay in new infra projects being shifted to InvITs and thus impact fresh sanctions," a bank executive said on condition of anonymity, adding that the concerns were flagged to the regulator in April.
In March, the RBI notified the Reserve Bank of India (Commercial Banks - Credit Facilities) Amendment Directions, 2026 (Revised), according to which banks can lend to both real estate investment trusts (REITs) and InvITs which are listed, have completed three years of operations and have not faced any adverse regulatory action in the past three years. The directions are to be implemented from July 1.
An industry executive said that if InvITs are not able to access cheaper credit, their asset acquisition would also be impacted. "The RBI has set the same standards for both REITs and InvITs, when both are different," he added. As per the latest government data, asset monetisation through InvITs and REITs has unlocked more than ₹1.5 lakh crore, recycling funds into new projects and attracting global investors.
Also read: RBI tightens scrutiny of overseas investments as outflows surge to $27 billion in FY26
According to a recent report by ratings agency Crisil, assets under management of road sector InvITs are likely to increase 30% to ₹3.9 lakh crore by the end of this financial year.
"The growth will be fuelled by monetisation of toll road assets by the National Highways Authority of India (NHAI) and continued traction in hybrid annuity model (HAM) asset sales by road developers," it said.
Earlier this month, the Securities and Exchange Board of India issued a circular stating that InvITs can use fresh borrowings exceeding 49% of their asset value for capital expenditure aimed at enhancing asset performance or augmenting capacity.
