The amendment introduces LTV caps, valuation norms, and exposure limits for loans against eligible securities. It strengthens risk controls and integrates such lending within capital market exposure norms.
The revised Directions formally recognize acquisition finance and bridge finance for promoter stakes under banks’ permitted financial services. The move aligns operational guidelines with updated credit norms.
Banks must now disclose granular capital market exposures, including acquisition finance, IPO funding, CMIs, and underwriting commitments. The amendment enhances transparency and aligns reporting with revised concentration risk norms.
The RBI now permits acquisition finance only for strategic control transactions, subject to strict eligibility, valuation standards, 25% borrower contribution, and a 3:1 debt-equity ceiling. The move strengthens prudential safeguards and limits excessive leverage in takeover funding.
The RBI capped aggregate CME at 40% of eligible capital and expanded the definition to include acquisition finance, bridge finance, and IPCs, strengthening concentration risk oversight.
IFSCA has launched a unified “Master Key” registration allowing IFSC entities to undertake multiple capital market activities through a single application. Separate fees remain payable for each approved activity.
The new directions modify risk-weighted asset treatment, limiting capital maintenance to CME exposure and aligning with concentration risk rules.
The RBI has amended IRACP norms to permit NBFCs to factor in Default Loss Guarantee arrangements while computing Expected Credit Loss, subject to IndAS conditions. The changes apply immediately.
The amendment sets a 40% aggregate CME ceiling and a 20% cap on direct investments. It strengthens prudential controls over market-linked exposures and intra-day risk management.
The Adjudicating Officer held that omission of a mandatory valuation report in private placement filings violates Rule 12(7) and attracts penalty under Section 450 of the Companies Act. The plea of oversight was rejected, reinforcing strict compliance in statutory e-forms.
