Skip to content
Free updates Login
BankingNABARD / RBI

RBI M&A Financing Rules and Stricter Broker Funding Norms

16 February 20261 min read
BANKING & FINANCERBI M&A FinancingRules and StricterBroker FundingNorms16 February 2026safalsetu.com

Why in the news

The RBI issued fresh guidelines on acquisition financing and broker funding, tightening some conditions while raising limits.

Acquisition financing

AspectRule
Listed acquirerNet worth of ₹500 crore or more, plus net profit three years running
Unlisted acquirerInvestment-grade rating needed
Exposure cap20% of eligible capital base (earlier proposal 10% of Tier-1)

Broker financing

  • Bank guarantees need 50% tangible collateral.
  • Funding for proprietary trading must be fully secured by high-quality collateral.

Exam angle

  • Control: 26%; ceiling: 90%.
  • Acquirer equity: minimum 25%.

Test yourself

1. Under RBI's new acquisition financing rules, what is the maximum share of an acquisition that banks may fund?

Bank financing is capped at 75%, with 25% minimum acquirer equity.

2. RBI capped banks' acquisition-financing exposure at what share of their eligible capital base?

The cap is 20% of eligible capital base.

3. What minimum net worth must a listed acquirer have under RBI's M&A financing norms?

Listed companies need at least ₹500 crore net worth.

This topic is part of Daily Current Affairs 15 & 16 February 2026 (16 topics).

All topics of the dayDay quizFebruary 2026

Read more