India's RBI caps loans against shares at ₹1 crore and defers revised norms to July
Change
India's RBI capped per‑borrower loans for purchasing shares and other eligible securities at ₹1 crore system‑wide and limited IPO, follow‑on and ESOP financing to ₹25 lakh per individual.
Why it matters
The change restricts individuals' ability to use bank credit for leveraged equity positions and reduces the scope for building large exposures across multiple lenders. Banks will face narrower permitted use cases for acquisition finance and steeper documentation requirements when lending to subsidiaries or special‑purpose vehicles.
Implications
- • Retail lending desks at banks must cap loans for share purchases at ₹1 crore per borrower.
- • Securities financing teams at banks must limit IPO, follow‑on and ESOP funding to ₹25 lakh per individual.
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