RBI allows SFBs to lend to MIs, sets fresh LTV ratio norms

KOLKATA The Reserve Bank of India has allowed small finance banks to lend to capital market intermediaries and has set fresh loan-to-value (LTV) ratio guidelines for lending against financial assets, including eligible securities. The central bank kept the LTV ceiling for lending against listed shares and convertible debt securities at 60%, for lending against equity mutual funds and units of equity traded funds at 75%, for lending against debt mutual funds at 85%. Likewise, LTV for lending against debt securities would be 75-85%, depending on rating of the instrument.