The Reserve Bank of India (RBI) on Thursday said banks could extend loans to individuals against long-term bonds issued by them. This would “provide liquidity to retail investors who are invested in long-term bonds issued by banks for financing infrastructure and affordable housing”, RBI said in a notification to banks.
However, the RBI said that “boards of the banks should lay down a policy in this regard prescribing suitable margins, purpose of the loan and other safeguards.”
Further, such loans should be subject to a ceiling, say, Rs.10 lakh per borrower.
