New Delhi, Nov. 19 -- The Reserve Bank of India's (RBI) draft framework for bank-led acquisition finance marks a decisive policy turn: Indian banks can now enter the acquisition finance market within a clear perimeter, reshaping the competitive dynamics between banks and private credit funds.

RBI has adopted a calibrated approach.

Funding has been limited to Indian listed companies acquiring 'control' in domestic or overseas companies, either at the acquirer level or through a special purpose vehicle (SPV) for strategic purposes, and creating long-term value rather than short-term financial engineering; the acquisition value must be backed by two independent valuations and banks must not finance more than 70% of that value, with a minim...