Bank financing of corp deals may steal pvt credit lunch

A recent regulatory change proposing banks enter into acquisition financing could potentially disrupt the fast-growing private credit industry in pricing and deal-picking, and over the long term, transform the way deals are structured, according to sector experts.

- Dipti Sharma

The Reserve Bank of India (RBI), as part of its Statement on Developmental and Regulatory Policies released alongside the monetary policy statement on 1 October proposed allowing banks to fund corporate buyouts.

At a broader level, the RBI's proposal is “very proactive and progressive” and is expected to goa long way in reducing the cost and enhancing availability of capital pools for individuals and corporates, said Bhavdeep Bhatt, chief executive officer of Northern Arc Investments.