Current Affairs · RBI Prudential Regulations
Regarding the Reserve Bank of India's (RBI) revised prudential framework for acquisition financing, which of the following best describes the modifications to equity contribution and capital sourcing requirements for corporate acquisitions?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The equity requirement has been standardized at 20% for unlisted firms with a net worth of ₹500 crore.
- 2Banks are now allowed to provide 100% financing for all acquisitions in the manufacturing sector, completely removing the requirement for an equity contribution.
- 3The mandatory equity contribution for acquisitions has been lowered from 30% to 25%, and banks are now permitted to count internal accruals as equity instead of requiring entirely fresh capital.✓
- 4The mandatory equity contribution has been reduced from 35% to 30%, provided that at least half of the contribution is sourced through fresh capital infusion.
Correct answer
The mandatory equity contribution for acquisitions has been lowered from 30% to 25%, and banks are now permitted to count internal accruals as equity instead of requiring entirely fresh capital.
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