Investor relief: RBI hikes loan limit against shares to Rs 1 crore, IPO financing to Rs 25 lakh

RBI Governor Sanjay Malhotra

The Reserve Bank of India (RBI) has raised the borrowing limit against shares from the existing Rs 20 lakh to Rs 1 crore per individual on Wednesday, October 1, 2025. The announcement was made by RBI Governor Sanjay Malhotra today after the Monetary Policy Committee meeting . The move is being seen as a big step to boost credit availability for investors.

The governor also confirmed that the repo rate, the rate at which the RBI lends to commercial banks, will remain unchanged at 5.5%.

Explaining the changes, Malhotra in  said, “It is proposed to remove the regulatory ceiling on lending against listed debt securities and enhance limits for lending by banks against shares from Rs 20 lakh to Rs1 crore, and for IPO financing from Rs 10 lakh to Rs 25 lakh per person.”

If you own shares or mutual funds but want to avoid redeeming them, you can access emergency funds by pledging your investments. Pledging lets you use assets like stocks, mutual funds, or other securities as collateral to obtain a loan from a financial institution or lender.

These loans offer fast access to cash without the need to sell your investments. They usually come with lower interest rates compared to personal loans or credit cards. The application process is straightforward, entirely digital, and requires minimal paperwork. You can secure such a loan with just a few clicks using your investing app.

At present, individuals can borrow up to 50% of the value of pledged shares, subject to a ceiling of Rs 20 lakh. With the latest revision, the maximum threshold has been raised significantly to Rs 1 crore.

Apart from this, the RBI has also raised financing limits for initial public offerings (IPOs) to Rs 25 lakh per person, up from Rs 10 lakh. As banks fund the application and later secure repayment through the allotted shares, IPO financing allows investors to participate in new share sales without having to arrange the full amount upfront.

The regulatory body also announced that lending against listed debt securities will be lifted. This category includes sovereign gold bonds (SGBs), corporate bonds, non-convertible debentures (NCDs), green bonds, and other instruments.

Market experts believe the move will deepen investor participation, provide greater liquidity, and encourage broader use of securities as collateral for credit.