The Reserve Bank of India on Friday proposed that banks be allowed to directly lend to real estate investment trusts (REITs) with certain prudential safeguards to deepen the financing pool for the real estate sector. Currently, REITs raise funds through bonds which are subscribed by mutual funds, NBFCs and others. Since these investments are mostly short-term (three-five years), long-term funding was a challenge for REITs. With RBI’s move on Friday, that hurdle will be gone, senior REIT executives said. REITs could also refinance their short-term debt with bank debt, they said.