RBI raises threshold for loan against shares, IPO financing
Oct 1, 2025
Synopsis
The Reserve Bank of India has announced multiple lending-related changes post the MPC meeting today. The loan limit against shares will increase from 20 lakh to 1 crore rupees per person. The central bank also proposed to remove the regulatory ceiling on lending against listed debt securities. This will expand borrowing options for individuals.
Reserve Bank of India (RBI) governor Sanjay Malhotra today announced an increase in the maximum amount an individual can raise as a loan by keeping their shares as collateral from Rs 20 lakh at present to Rs 1 crore. The RBI also announced that the repo rate remains unchanged at 5.5%.
RBI governor Sanjay Malhotra said on October 1, 2025: "It is proposed to (a) remove the regulatory ceiling on lending against listed debt securities and (b) enhance limits for lending by banks against shares from Rs. 20 lakh to Rs. 1 crore and for IPO financing from Rs 10 lakh to Rs 25 lakh per person."
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Currently, the maximum amount an individual can borrow against shares is up to 50% of the total value of the pledged shares, with a ceiling of Rs 20 lakhs. This will increase to Rs 1 crore per person after the announcement. Along with this, lending limits for loans against REITs and InvITs will also be raised.
As per the RBI's Statement on Developmental and Regulatory Policies, the limit for lending by banks against shares, units of REITs, and units of InvITs will be enhanced, while also removing the regulatory ceiling altogether on lending against listed debt securities. A notification to this extent will also be issued soon.
Similarly, the amount for IPO financing an individual can raise will go up from its present threshold of Rs 10 lakh to Rs 25 lakh per person. IPO financing is a short-term loan that allows an individual to fund their investments in an IPO, or initial public offering, even if they do not have the entire amount at hand. Once the customer is allotted the shares, they are taken as collateral for the purposes of paying back the loan.
The governor also proposed to remove the regulatory ceiling on lending against listed debt securities, which includes government bonds such as SGBs (sovereign gold bonds), corporate bonds, debentures (including Non-convertible debentures), green bonds and more. While more details on the same are awaited, it is expected to make borrowing against listed debt securities easier
[The Economic Times]
