The RBI’s latest policy shift could be a game-changer for Indian deal-making. For decades, promoters and corporates looking at acquisitions were compelled to depend on non-banking, high cost options. With banks now allowed to directly fund M&As, a more balanced and competitive financing ecosystem emerges. The key will be to balance opportunity with prudence, ensuring robust risk frameworks so that leveraged buyouts do not compromise financial stability.
My quote in the Times of India on the above: “For decades, Indian acquirers have been forced to rely on expensive private credit, NBFCs, or offshore lenders to fund takeovers, while domestic banks watched from the sidelines. Allowing banks into this space not only lowers the cost of capital for Indian businesses but also plugs a strategic gap where our banking sector has lagged global peers.
