New RBI Norms May Boost Bank Funding for M&A in Key Sectors

Imagine banks in India usually lend money for everyday things.

Now, the country's main bank, the RBI, has made a new rule.

This rule lets banks lend money to companies that want to buy other companies, especially in big industries like medicine, energy, and building things.

This is like giving banks a new way to help businesses grow.

Banks can pay for up to 70% of the purchase price, with the buyer paying the rest.

This could make borrowing money cheaper for companies wanting to buy others.

However, some rules, like how much debt a company can have after buying another, are a bit strict.

Some think these rules might need adjusting, as big infrastructure deals often have more debt.

Overall, this is a new way for banks to help big industries combine and grow.