RBI issues Amendment Directions on Capital Market Exposure

The Reserve Bank of India (RBI) had, on October 24, 2025, issued two draft Directions on Capital Market Exposure (CME), namely:
(i) Reserve Bank of India (Commercial Banks – Capital Market Exposure) Directions, 2025 and
(ii) Reserve Bank of India (Small Finance Banks – Capital Market Exposure) Directions, 2025,
seeking feedback from stakeholders.

The draft Directions were primarily aimed at:
(i) providing an enabling framework for banks to finance acquisitions by Indian corporates;
(ii) enhancing the limits for bank lending against shares and units of REITs and InvITs, while removing the regulatory ceiling on lending against listed debt securities; and
(iii) establishing a more principle-based framework for lending to capital market intermediaries (CMIs).

The feedback received from stakeholders on the draft Directions has been carefully examined. Based on this feedback, the Reserve Bank has made appropriate modifications, which have now been incorporated into the final Directions.