Reserve Bank of India (RBI) defers capital market exposures norms to 1 July 2026

Key facts

• Reserve Bank of India (RBI) has deferred the effective date of the Amendment Directions on Capital Market Exposures by three months to 1 July 2026.
• The central bank revised the framework after stakeholder feedback, modifying the definition of acquisition finance to include mergers and amalgamations.
• Acquisition finance is now limited to acquiring a non-financial entity and can be availed by the acquiring company for on-lending to an India- or overseas-incorporated subsidiary.
• Refinance of acquisition finance is permitted only after the acquisition is fully concluded and control of the target company is established, with the refinance used solely to retire the original debt.
• A corporate guarantee from the acquiring company is mandatory when acquisition finance is extended to its subsidiary or special purpose vehicle.
• The guidelines also aim to rationalise banks’ lending limits to individuals against shares, REIT units, InvIT units, and introduce a principle-based framework for lending to capital market intermediaries.