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# RBI Introduces Acquisition Finance Framework Allowing Banks to Fund 75% of Indian M&A Deals
- URL: https://www.theglobalbanker.com/rbi-acquisition-finance-framework-75-percent-india-ma-2026/
- Published: 2026-02-13T16:00:00.000Z
- Updated: 2026-10-02T14:23:18.000Z
- Description: India's RBI has introduced an acquisition finance framework allowing banks to fund up to 75% of qualifying M&A transactions by acquirers with at least INR 500 crore net worth.
- Author: TGB Editorial Team
- Tags: Regulations, Asia-Pacific, #archive

The Reserve Bank of India has introduced an acquisition finance framework that allows banks to provide funding covering up to 75% of the value of qualifying mergers and acquisitions. The framework, announced in February 2026, applies specifically to transactions that result in a change of control.

Under the new rules, acquisition lending is available for both listed and unlisted target companies, provided the acquirer and target meet specific eligibility criteria established by the RBI. Acquirers must have a net worth of at least INR 500 crore and a net profit in each of the previous three financial years (unlisted acquirers also need an investment-grade rating of BBB- or above).

#### LENDER REQUIREMENTS

Lenders are still required to conduct their own independent credit assessments of both the acquiring entity and the target.

The RBI requires the acquirer to fund the remaining 25% from its own funds, such as internal accruals or fresh equity. 

RBI rules had previously barred banks from financing the acquisition of shares by domestic companies. The RBI's framework lifts that restriction.

#### STATED AIM

The RBI said the changes were aimed primarily at providing an enabling framework for banks to finance acquisitions by Indian corporates.