Current · Source: Reserve Bank of India · RBI/2026-27/110 · issued 10 Jun 2026 · ~1 min read
Quick answerRBI introduces new exposure limits for real estate sector, banks must set internal limits and sub-limits for various sub-categories of real estate exposures.
The rule, in the simplest words
Banks must set their own internal limits (rules they create) for the total amount they lend to the real estate sector (property business).
Banks must also set sub‑limits (smaller rules) for each type of real‑estate exposure, such as loans to developers, mortgage loans, and REITs.
The sub‑limit for REITs (companies that own property and let people invest) cannot be more than 10% of the bank’s eligible capital base (the money the bank is allowed to use for risk).
These limits must match the bank’s business model and be reviewed regularly to avoid too much concentration in property.
How it plays out — a real example
Rohit Sharma, a real‑estate loan officer in Mumbai, starts his day by checking the bank’s dashboard. He sees that the total property exposure is within the internal limit he set, and the amount invested in REITs is 9% of the bank’s eligible capital base, safely below the 10% ceiling. When a new REIT loan request comes in, Rohit politely explains that the bank must keep the REIT exposure under 10%, so he either adjusts the loan size or waits for another opportunity, ensuring the bank follows RBI’s new rule.
What changed
Paragraph 94 of Chapter V - Exposure Norms in RBI Directions 2025 is deleted.
New paragraphs 94A are inserted, requiring banks to set internal limits for aggregate exposure to real estate sector and sub-limits for various sub-categories of real estate exposures.
A prudential ceiling of 10% of eligible capital base is set for banks' aggregate exposure towards real estate investment trusts (REITs).
What it means for you
Banks must manage concentration risk by setting internal limits and sub-limits for real estate exposures, ensuring they do not exceed the prudential ceiling for REITs.
This will help prevent excessive exposure to real estate sector and mitigate potential risks to the banking system.
What you must do
Review and update internal limits and sub-limits for real estate exposures in accordance with business model.
Ensure compliance with the prudential ceiling of 10% of eligible capital base for aggregate exposure towards REITs.
Monitor and report on real estate exposures as per RBI guidelines.
Who it affects
Commercial banks, Real estate sector, Banks' customers with real estate exposures
❓ Common questions
What is the prudential ceiling for banks' aggregate exposure towards REITs?
10% of eligible capital base.
When do the new Directions come into force?
October 1, 2026, or an earlier date if the directions contained in the Reserve Bank of India (Commercial Banks – Credit Facilities) Third Amendment Directions, 2026 are adopted by a bank in entirety.
What is the purpose of the new Directions?
To manage concentration risk by setting internal limits and sub-limits for real estate exposures and prevent excessive exposure to the real estate sector.
📜 Read the original circular — full text as issued by RBI
RBI/2026-27/110
DOR.CRE.REC.90/07.03.001/2026-27
June 10, 2026
Reserve Bank of India (Commercial Banks – Concentration Risk Management) Third Amendment Directions, 2026
Please refer to the Reserve Bank of India (Commercial Banks – Concentration Risk Management) Directions, 2025 (hereinafter referred to as ‘ Directions ’).
2. Consequent to the amendments proposed in the Reserve Bank of India (Commercial Banks – Credit Facilities) Third Amendment Directions, 2026 , and in exercise of the powers conferred by Sections 21 and 35A of the Banking Regulation Act, 1949 and all other provisions / laws enabling the Reserve Bank of India in this regard, the Reserve Bank of India, being satisfied that it is necessary and expedient in public interest so to do , hereby, issues the Directions hereinafter specified.
3. These Amendment Directions shall modify the Directions as under:
3(1) In ‘Chapter V - Exposure Norms’ of the Directions, paragraph 94 shall be deleted.
3(2) The following new paragraphs shall be inserted, namely:
“94A. A bank shall fix internal limits for its aggregate exposure to real estate sector, as also sub-limits for various sub-categories of real estate exposures in accordance with its business model.
Provided that the sub-limit for a bank’s aggregate exposure towards real estate investment trusts (REITs) shall be subject to a prudential ceiling of 10 per cent of the bank’s eligible capital base.”
4. These Directions shall come into force from October 1, 2026 , or an earlier date if the directions contained in the Reserve Bank of India (Commercial Banks – Credit Facilities) Third Amendment Directions, 2026 are adopted by a bank in entirety.
(Vaibhav Chaturvedi)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2026-27/110 · issued 10 Jun 2026. The plain-English explanation above is BankPulse’s own independent summary.
Ensure compliance with the prudential ceiling of 10% of eligible capital base for aggregate exposure towards REITs.
📜 Compliance
Review and update internal limits and sub-limits for real estate exposures in accordance with business model.
Monitor and report on real estate exposures as per RBI guidelines.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (Commercial banks, Real estate sector, Banks' customers with real estate exposures), your first concrete step on “RBI Concentration Risk Management Directions 2026” is: “Review and update internal limits and sub-limits for real estate exposures in accordance with business model.” (RBI issued this 10 Jun 2026).
Action required: Review and update internal limits and sub-limits for real estate exposures in accordance with business model.
Action required: Ensure compliance with the prudential ceiling of 10% of eligible capital base for aggregate exposure towards REITs.
Action required: Monitor and report on real estate exposures as per RBI guidelines.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 02 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13479&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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