Acquisition financing guidelines empower banks, with guardrails

Banks to seek clarity on scope and structure of new framework

- MAHESH NAYAK

THE RESERVE BANK of India's (RBI) draft guidelines permitting banks to offer acquisition financing, released on October 24, could be a game-changer, believe some public sector banks, as they gear up to leverage their international presence to actively participate in large ticket M&A deals.

"This opens up a significant strategic opportunity for us to deepen our global footprint and support cross-border consolidation with greater agility and scale," said Ashwani Kumar, MD & CEO, UCO Bank.

Agreeing with him, Rajneesh Karnatak, MD & CEO, Bank of India, said the relaxation on acquisition financing marks a major step in corporate credit and opens a significant new business avenue for banks. "The move allows banks to directly fund mergers, acquisitions, and corporate takeovers. We are looking forward to leveraging our global presence, including our operations in the GIFT City, to support such transactions."