RBI makes up for no rate cut with big reform push

EVEN AS the Reserve Bank of India (RBI)-led Monetary Policy Committee (MPC) 'disappointed' retail borrowers on the rate cut front, the RBI sought to compensate by increasing the cap on bank lending to retail investors for initial public offering (IPO) subscriptions from 10 lakh to ₹25 lakh per borrower.

- BENN KOCHUVEEDAN @Mumbai

This was part of a flurry of RBI's 22 regulatory changes aimed at improving customer convenience, boosting credit flow to the economy and individuals, reducing compliance costs for regulated entities and enhancing overall ease of doing business.

Topping the list is the revamp of lending norms for capital market participation. By easing rules and raising lending limits, the regulator has enabled a smoother flow of funds into capital markets via the banking route. This threepronged push seeks to unlock more credit, fuel corporate deal-making, and give banks a bigger role in equity and debt financing. Key measures include upping lending caps for IPO funding and allowing banks to lend more against securities owned by individuals.