Overview

• The central bank proposed lifting the per-person loan cap against shares to Rs 1 crore from Rs 20 lakh and raising IPO financing limits to Rs 25 lakh from Rs 10 lakh.
• It also proposed removing the regulatory ceiling on bank lending against listed debt securities, broadening collateral-based credit access for investors.
• RBI said it will issue draft guidelines shortly, including an enabling, principle-based framework for bank financing of corporate acquisitions and lending to market intermediaries.
• Officials framed the move as long overdue and supported by stronger bank risk management, noting LAS limits had not been revised since 1998.
• Analysts expect increased market liquidity and new bank revenue opportunities but warn that higher leverage could intensify margin calls and selling without robust haircuts and concentration limits.