The RBI’s decision to allow banks to invests in REITS and InvITs are viewed as a risk diversification strategy.

Senior Director at Crisil Ratings Krishnan Sitaraman told BusinessLine that until today banks were not in a position to invest in instruments, such as REITS and InvITs, which are innovative instruments aimed at promoting investments in the infrastructure sector. It will create a new channel for more investments in the reality and infrastructure sector. Post-demonetisation, the deposit base of banks has gone up, and now these banks have a a good opportunity to support the sectors.

It is a step in the right direction and it will bring greater investment flows into InvITs. It is also seen as one more opportunity to diversify banks’ investment portfolios.