To provide liquidity to retail investors investing in long-term bonds issued by banks for financing infrastructure and affordable housing, the Reserve Bank of India said banks can extend loans to individuals against these bonds.
The central bank said 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, and tenure of loan should be within the maturity period of the bonds.
The RBI also stated that banks are not permitted to lend against such bonds issued by other banks.