The Reserve Bank of India (RBI) has released draft guidelines that could allow banks in India to fund corporate acquisitions and increase loans to individuals for investing in shares.
Under these proposed rules, banks could offer more financial support to companies looking to acquire other businesses and also help individuals invest more in IPOs, FPOs, and employee stock option plans (ESOPs).
The RBI plans to implement these norms from April 1, 2026.
The central bank has invited feedback from stakeholders on the draft guidelines until November 21, 2025.
How Banks Can Finance Acquisitions
According to the draft “Reserve Bank of India (Commercial Banks – Capital Market Lending) Guidelines, 2025”, banks can now finance up to 70% of an acquisition’s value.
The remaining 30% must come from the acquiring company’s own funds as equity.
This move is expected to boost mergers and acquisitions in India, as banks will have clearer rules to provide funding — a change that has long been requested by Indian banks.
Recently, SBI Chairman C.S. Setty also highlighted the need for banks to support acquisitions, similar to practices followed by global lenders.
Increased Loan Limits for Individual Investors
The draft guidelines also increase the maximum loan amount for individuals to invest in shares.
Currently, banks can provide up to ₹10 lakh per person for buying shares under an IPO, FPO, or ESOP.
Under the new norms, this limit would rise to ₹25 lakh per person, giving retail investors a greater ability to participate in capital markets.
Certain conditions will apply to these loans to ensure responsible lending.
What This Means
If implemented, these guidelines could open new avenues for corporate funding and encourage more retail participation in the stock market.
Stakeholders have until November 21, 2025 to submit their comments before the rules are finalized.
