Banks can fund up to 70% of M&A value: RBI

THE Reserve Bank of India (RBI) has issued draft guidelines to allow banks to fund India Inc to acquire strategic equity stakes, in full or in part both, domestic and overseas, in listed companies as a strategic investment that creates long-term value rather than for short-term financial restructuring.

- BENN KOCHUVEEDAN @Mumbai

From April 2026, banks can lend up to 70% of the acquisition value, with the reminder amount coming in from the acquirer's own equity. In a draft circular issued late on Friday, the central bank, however, put a caveat that acquiring companies are listed entities with satisfactory net worth and have been profitable for the previous three years.