New Delhi, Oct. 29 -- Amid the torrent of regulatory notifications from the Reserve Bank of India (RBI) after its last monetary policy meeting, one of the pleasant surprises was its green-lighting of the financing of mergers and acquisitions (M&As) by domestic banks, placing them at par with their global peers.

This move is likely to foster innovation and nudge stronger banks to adopt best global practices even as they work on a best-fit model to serve corporate clients along their entire financial life-cycle. It is rather surprising that the M&A sphere was not open to public sector banks earlier.

RBI's draft circular outlines guard-rails for acquisition finance by banks to listed Indian corporates for acquiring equity stakes in domesti...