The Reserve Bank of India (RBI), on March 2026, has deferred the implementation of its Amendment Directions on Capital Market Exposures to July 1, 2026, instead of the earlier effective date of April 1, 2026, following representations from banks, capital market intermediaries, and industry bodies highlighting operational and interpretational challenges. The revised framework aims to facilitate acquisition financing, rationalise lending limits against financial assets, and introduce a principles-based approach for exposures to capital market intermediaries.
The RBI has also introduced key clarifications, including expansion of the definition of acquisition finance to cover mergers and amalgamations, restriction of such finance to acquisition of control over non-financial companies, and conditions for financing through subsidiaries or SPVs along with mandatory corporate guarantees. Further, limits on loans against shares, REITs, InvITs, and for IPO/FPO/ESOP subscriptions have been clarified to be at the banking system level, while revised norms for financing capital market intermediaries now permit funding against full cash collateral and remove certain earlier restrictions.
These revised directions are issued under multiple regulatory frameworks governing banking operations, including credit facilities, concentration risk management, prudential norms on capital adequacy, financial statements and disclosures, and undertaking of financial services for commercial banks and small finance banks. The amendments operate within the broader legal framework of the Banking Regulation Act, 1949 and the Reserve Bank of India Act, 1934, ensuring regulatory oversight of capital market exposures and risk management practices.
[Notification No. RBI/2025-26/251]
