Economics · REIT Financial Policies

Analyze the structural frameworks of Real Estate Investment Trusts (REITs): Statement 1: The investment in REITs by commercial banks is treated as Capital Market Exposure (CME) under RBI rules, subject to overall limits, and does not inherently require a dedicated real estate subsidiary. Statement 2: According to the SEBI (REIT) Regulations 2014, a REIT is structured as a three-tier entity comprising the Sponsor, the Manager, and the Trustee. Statement 3: In terms of the financial distribution policy, a REIT must distribute at least ninety percent of its net distributable cash flows to its unit holders at least half-yearly. Statement 4: The REIT framework allows the manager to unilaterally retain up to fifty percent of the income for future acquisitions without seeking unit holder approval, provided the debt-to-equity ratio remains below 1.0. Which of the summaries or individual statements mentioned above contains an incorrect operational clause?