Mumbai, June 10 -- The Reserve Bank of India has tightened rules governing banks' exposure to real estate investment trusts (Reits) and infrastructure investment trusts (InvITs), rejecting industry requests to permit land financing, allow refinancing of under-construction projects and align exposure limits with those set by the Securities and Exchange Board of India (Sebi).

In the final rules issued on Wednesday, the central bank drew a firm line on indirect lending to infrastructure vehicles, saying banks may finance only cash-generating, completed assets.

"As a principle, activities that cannot be undertaken directly shall also not be undertaken indirectly," the central bank said, adding that, "In all cases, not less than 80% of the v...