Leveraged Buyouts Reforms: RBI's New Lending Vision

Acuity Law recently, on 30September 2025 published an article titled 'Leveraged Buyouts in India: Navigating Financial Strategies Amid Regulatory Challenges', which highlights the current prohibition on Indian Banks from directly financing any acquisitions and leveraged buyouts, owing to strict regulatory restrictions. In light of State Bank of India's ("SBI") request advocating for Indian banks to participate in financing corporate acquisitions, the Reserve Bank of India ("RBI"), has expressed its intention to address these longstanding demands.

The Reserve Bank of India Governor, Mr. Sanjay Malhotra, in his official Statement made at the RBI's Monetary Policy Committee meeting held on 1 October 2025, announced the necessity of permitting Indian banks to finance acquisitions by Indian corporates, in order to broaden the scope of capital market lending by banks and enhance the credit flow within the Indian economy. The RBI inter alia proposed, several key measures