RBI Plans New Regulations Restricting Private Equity Control Over Multiple Non-Bank Lenders

The Reserve Bank of India is reportedly drafting new regulations to prevent private equity firms from holding controlling stakes in multiple non-bank financial companies. Officials are concerned that financial distress at a global firm could trigger a <b>contagion effect</b> across several lenders simultaneously. Under the proposed framework, investments exceeding 25% in listed firms or those granting management control will face heightened scrutiny. Conversely, the central bank intends to encourage smaller financial investments of 15% or less to support sector growth. A draft of these rules is expected to be finalized following public consultation, with formal issuance likely scheduled for early next year.