Overview

• SBI chairman C.S. Setty said the Indian Banks’ Association will file a formal request asking the RBI to allow lending for acquisitions, as stated at the FIBAC 2025 conference in Mumbai.
• The proposal seeks an initial green light only for transactions involving listed companies with clear governance and shareholder approval to address historic concerns over hostile takeovers.
• Under current rules, banks cannot fund takeovers, pushing companies toward bonds, private credit and NBFCs for deal financing.
• Corporate reliance on capital markets remains elevated, with firms raising a record Rs 4.07 trillion through bonds between April and July, according to Prime Database.
• Industry voices, including BCG’s Ruchin Goyal, argue healthier bank balance sheets and lower bad loans support reconsidering the ban, though any change awaits RBI evaluation.