Quick Summary
The Reserve Bank of India (RBI) has issued a comprehensive set of Amendment Directions on Capital Market Exposure aimed at modernizing and strengthening how banks manage exposure to equity and market-linked assets. The move follows extensive stakeholder feedback on draft guidelines released in late October 2025. The new directions target key areas, including corporate acquisition financing, lending against market securities, and risk management frameworks, reflecting RBI's commitment to enhanci
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FAQ :
The new directions aim to modernise and strengthen how banks manage their exposure to equity and market-linked assets, enhancing credit flow to capital markets while maintaining financial stability.
Banks are now provided with a clearer regulatory path to fund acquisition financing for Indian corporates, which is expected to support mergers and growth activities.
The limit for lending against shares and units of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) has been enhanced, and regulatory ceilings on lending against listed debt securities have been removed.
The guidelines introduce a principle-based risk framework that strengthens risk-management requirements for lending to capital market intermediaries, encouraging robust internal controls and risk assessment.
The changes are expected to catalyse credit support for growth-oriented corporates, improve liquidity in key market segments, align with international best practices, and support deeper integration of banks with India's capital markets.
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