In a major move to deepen credit access for investors and boost market participation, the Reserve Bank of India (RBI) has significantly relaxed lending norms against securities. Effective October 1, 2025, individuals can now borrow up to ₹1 crore by pledging their listed shares — a fivefold increase from the earlier cap of ₹20 lakh. Additionally, the limit for IPO financing has been raised from ₹10 lakh to ₹25 lakh, making it easier for retail investors to participate in new stock offerings.
Announcing the changes after the Monetary Policy Committee meeting, RBI Governor Sanjay Malhotra said the central bank aims to “enhance lending limits and remove restrictions to make capital more accessible without forcing investors to liquidate their portfolios.”
What Is a Loan Against Shares?
A loan against shares allows investors to borrow money by pledging their stocks, mutual funds, or securities as collateral — without selling them. It’s a preferred choice for those who need emergency funds or want to finance new investments while retaining ownership of their portfolio.
For instance, if you hold shares worth ₹50 lakh, you could earlier borrow only ₹20 lakh. With the new rules, depending on lender policies, you could now access up to ₹1 crore.
Why This Change Matters
- More financial flexibility: Investors facing short-term cash needs for education, healthcare, or business can now borrow more without disturbing their long-term holdings.
- Enhanced IPO participation: With the IPO loan limit raised to ₹25 lakh, more investors can bid for larger allocations using borrowed funds.
- Broader borrowing options: RBI has also removed restrictions on loans against listed debt securities such as bonds and debentures, further expanding collateral choices.
Key Considerations and Risks
While borrowing against shares is now easier, investors should be cautious. Market volatility can trigger margin calls, requiring additional collateral or leading to partial liquidation. Interest costs and fees, though often lower than personal loans, can add up over time.
Bottom Line
The RBI’s latest policy shift is a significant boost for investors, giving them greater access to capital without selling their investments. With higher borrowing limits, improved IPO financing, and more collateral options, investors can now leverage their portfolios strategically — provided they manage risks wisely.
