The Reserve Bank of India (RBI) has eased its proposed norms on acquisition financing, allowing banks to extend aggregate exposure of up to 20% of their capital towards such funding, up from the earlier proposed cap of 10%. The relaxation follows requests from several lenders who said the previous limit curtailed their ability to participate in acquisition deals. The RBI released the final capital exposure market guidelines on Friday. The draft version had been issued on October 24. In a key change, the regulator has permitted banks to finance the acquisition of unlisted companies, provided the target has a minimum net worth of Rs 500 crore, has been profit-making for the last three years, and carries an investment-grade rating (BBB– or above) from a credit rating agency. The draft guidelines had restricted financing to listed entities only.