Indian Banks Pitch M&A Financing to Corporates After RBI Eases Rules

Indian banks are actively pitching mergers-and-acquisitions financing to corporate clients after the Reserve Bank of India introduced new norms allowing them to lend against acquisitions, opening a business long dominated by private credit funds and offshore lenders. The rule change permits banks to finance corporate takeovers under defined conditions, giving domestic lenders a foothold in a lucrative segment as deal activity picks up. Bankers see the shift as a chance to deepen relationships with large corporate borrowers and to compete on price and speed with alternative credit providers that had filled the gap while banks were restricted. The move aligns with a broader deepening of India's credit markets: analysts have flagged that India Inc is expected to require tens of trillions of rupees in debt funding over the coming years to support the country's long-term growth ambitions, and a wider debt capital market is seen as essential. For banks, acquisition financing offers higher-yielding lending opportunities, though it also brings added credit and concentration risks that supervisors will monitor. The development signals growing competition between traditional lenders and the rapidly expanding private credit industry in India.