RBI defers acquisition financing, capital market norms to July 1

Mumbai, Mar 30, 2026

Central bank extends deadline by three months after industry flags operational and interpretational issues; also clarifies rules on acquisition finance and capital market exposure

The Reserve Bank of India (RBI) late on Monday deferred the capital market exposure norms to July 1. These norms, which include acquisition financing guidelines, were scheduled to come into effect from April 1.

RBI said it had received representations from banks, capital market intermediaries, and various industry associations seeking an extension of the effective date, and also flagging certain operational and interpretational issues for clarification.

"On a review, based on further discussions with the stakeholders, it has been decided to extend the effective date of the said Amendment Directions by three months to July 1, 2026," RBI said in a statement.

Moreover, the regulator proposed a few changes while clarifying certain provisions relating to acquisition finance and exposures to capital market intermediaries.

RBI said the definition of acquisition finance has been modified to include mergers and amalgamations. It also said acquisition finance may be extended only for acquiring control over a non-financial target company.

For finance to capital market intermediaries, RBI has removed the prohibition on extending finance to market makers against securities in which the market-making operations are undertaken.

"Bank financing to CMIs for proprietary trading may be undertaken against 100 per cent collateral comprising cash or cash equivalents," RBI said.

It was also clarified that intraday facilities to non-debt mutual funds secured by guaranteed receivables due on the same day on account of maturity proceeds of G-Secs, T-Bills, SDLs, or interest from G-Secs and SDLs held by such mutual funds, or maturity proceeds of TREPS from CCIL, shall not be reckoned as capital market exposure (CME).

[The Business Standard]