Expanded lending limits: The Reserve Bank of India (RBI) has proposed to expand the limit for lending against shares and securities to INR 10 mn (USD 106k) from INR 2.5 mn per borrower across the banking system, according to a press release. The revised norms allow Indian banks — for the first time — to fund up to 75% of a corporate M&A. IPO and ESOP financing is limited at INR 2.5 mn (USD 26.5k) per individual.

Why it matters: For over 70 years, Indian banks were largely barred from financing equity buyouts to prevent systemic risk. This forced companies to rely on expensive non-banking financial companies’ debt, private credit, or offshore lending to fund acquisitions. Now, any non-banking financial company with a net worth over INR 5 bn (USD 54 mn) and a three-year earnings track record can tap domestic bank lending to fund three-quarters of a transaction’s value.

Risk controls for banks: The RBI also mandated corporate underwriting when banks fund acquisitions via subsidiaries or special purpose vehicles, tightening risk management and accountability.

Delayed timelines: The implementation of the new rules has been delayed by three months to 1 July 2026 following feedback from capital markets and industry stakeholders over operational issues.

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