RBI extends deadline for new capital market rules by three months

The Reserve Bank of India on 30 March 2026 deferred the implementation of its amended capital market exposure norms by three months to 1 July 2026, following feedback from banks, capital market intermediaries and industry bodies flagging operational and interpretational challenges.

The revised directions, originally scheduled to come into effect from 1 April 2026, are aimed at enabling bank financing for corporate acquisitions, rationalising lending limits against financial assets such as shares and REIT units, and introducing a more principle-based framework for lending to capital market intermediaries.

Alongside the extension, the central bank introduced key clarifications. It expanded the definition of acquisition finance to include mergers and amalgamations and specified that such financing can only be extended for acquiring control in non-financial companies. It also allowed acquisition finance to be routed through subsidiaries and set conditions for refinancing and corporate guarantees.

The RBI further clarified that loans to individuals against securities will be capped at Rs 1 crore, while funding for IPOs, FPOs and ESOPs will be limited to Rs 25 lakh per individual at the banking system level. In addition, banks can now extend funding to intermediaries for proprietary trading against 100% cash or cash-equivalent collateral, while certain restrictions on market-making activities have been eased.

The move is expected to give stakeholders additional time to align with the revised framework while addressing concerns related to implementation.

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