6 months ago
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The removal of restrictions connected banks for acquisition financing volition assistance the existent economy, Reserve Bank of India Governor Sanjay Malhotra said connected Friday (November 7, 2025).
Last month, the RBI allowed banks to money acquisitions and raised the headdress connected loans for buying shares astatine IPOs, arsenic portion of a raft of measures to boost slope lending successful the world’s fifth-largest economy.
“These travel arsenic you are aware... with guardrails, similar limiting slope backing to 70% of the woody value, limits connected indebtedness to equity ratio... which volition guarantee information portion allowing banks and their stakeholders to scope the benefits of further business,” the RBI main said.
While speaking astatine the State Bank of India’s Banking and Economics Conclave, Mr. Malhotra said nary regulator tin oregon should substitute boardroom judgment, particularly successful a state similar India, wherever each case, each loan, each deposit, each transaction is different.
“We request to let the regulated entities to instrumentality decisions based connected the merits of each case, alternatively than prescribing a 1 size acceptable each rule,” helium added.
The apex slope main besides said supervisory actions person enabled an effectual backstop to mean oregon prune unsustainable maturation and signifier a robust, resilient and beauteous banking system.
The RBI has ample tools, hazard weights, provisioning norms, antagonistic cyclical buffers to incorporate emerging risks, helium added.
