RBI Ups Acquisition Finance Limit to 75% for Banks, New Norms from April 1

• RBI increases bank lending limit for acquisition finance to 75% of deal value, up from 70% proposed.
• Banks can now fund promoters' stake in new company setups.
• Credit assessment will be based on pro-forma consolidated financials of both acquiring and target entities.
• Acquiring company must arrange remaining amount through internal accruals or fresh equity.
• New rules effective from April 1, requiring board-approved policy and specific borrower criteria.