The Reserve Bank of India (RBI) has introduced significant amendments to its Commercial Banks – Credit Facilities Amendment Directions, 2026, and the External Commercial Borrowing (ECB) framework. These changes aim to invigorate India’s mergers and acquisitions (M&A) landscape by allowing commercial banks to finance up to 75% of M&A deals involving a change of control, thereby boosting domestic corporate activity and strengthening balance sheets. The framework also extends acquisition finance to unlisted companies with investment-grade ratings, a crucial development for large family-owned conglomerates and unicorns.
Concurrently, the revamped ECB framework shifts to a market-linked pricing regime, broadening the pool of eligible lenders and borrowers, including LLPs, and liberalizing end-use restrictions to support strategic corporate actions. These reforms are expected to foster a more transparent and competitive acquisition environment, promoting long-term value creation for India Inc.
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