RBI’s latest directive removes the ₹20 lakh ceiling that had constrained individual borrowers, allowing lenders to offer larger loans against listed securities.
Under the new framework, banks can still only lend up to 60% of the market value of eligible shares, but the overall exposure per borrower can now be significantly higher, subject to bank policies.
The RBI also mandated that lenders monitor the loan‑to‑value ratio continuously, requiring borrowers to maintain collateral coverage if share prices drop.
The change is part of a broader effort to improve liquidity for long‑term investors, according to RBI's chief, Raghuram Rajan, who said the move would boost credit flow without increasing systemic risk.
Early reports indicate several banks are adjusting their LAS products, with some tightening eligibility lists and revising interest rates, while borrowers like 45‑year‑old software engineer Arjun Mehta see the new ceiling as a chance to finance a home renovation without selling stocks.
The RBI will monitor the impact of the revised ceiling in the next policy review, slated for December 2026, when banks will report on loan utilisation and LTV trends.