The Reserve Bank of India, through its revised Amendment Directions dated March 30, 2026, has introduced significant changes to the framework governing credit facilities of commercial banks. The amendments primarily expand the definitional scope by introducing key concepts such as acquisition finance, bridge finance, capital market intermediaries (CMIs), eligible securities, and loan-to-value (LTV), while aligning “control” with the Companies Act, 2013. A comprehensive overhaul of the acquisition finance regime has been undertaken, restricting such financing to strategic control acquisitions by financially sound non-financial entities, with caps on bank funding, mandatory borrower contribution, leverage limits, and enhanced security requirements. The Directions also revamp the framework for loans against financial assets by prescribing eligible securities, LTV ceilings, prudential limits, and end-use monitoring, alongside tightening norms for IPO/FPO/ESOP financing. Further, a new chapter introduces detailed regulations for bank exposure to CMIs, including permissible facilities, prohibition on proprietary trading finance (with limited exceptions), and stringent collateral requirements. These amendments strengthen governance through enhanced Board oversight and will come into effect from July 1, 2026, with existing exposures allowed to run till maturity while new or renewed facilities must comply with the revised norms.
Link – https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13346&Mode=0
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