India's acquisition finance market gets a major regulatory boost.

India's acquisition finance market gets a major regulatory boost. The Reserve Bank of India's February 2026 amendments now allow banks to fund strategic buyouts under a structured framework, opening a regulated channel for bank-led acquisitions. Acquirers must demonstrate net worth of 500 crore rupees and positive profits for three consecutive years. Banks can finance up to 75 percent of acquisition value while acquirers contribute minimum 25 percent from their own funds. Post-acquisition debt-to-equity ratios must not exceed 3:1, and mandatory corporate guarantees are required. The RBI's conservative approach prioritizes prudence through explicit on-recourse requirements, deliberately avoiding non-recourse leveraged buyout structures that could amplify financial sector risk.