Mumbai, Aug. 16 :    Mumbai, Aug. 16:  The Reserve Bank of India today allowed banks to finance successful bidders for the acquisition of shares of disinvested public sector units (PSUs), including the secondary stage of mandatory open offer. The central bank also said it would consider on a case by case basis relaxing the 5 per cent ceiling on banks' exposure to capital market to enable them to finance the programme. The relaxation will be made so as to keep the exposure of banks to the capital market in all forms, net of its advances for financing of acquisition of PSU shares within the regulatory ceiling of 5 per cent, the RBI said in a circular to all scheduled commercial banks. This would be subject to adequate safeguards regarding margin, bank's exposure to capital market, internal control and risk management systems. RBI also said that it will consider relaxation, on specific requests from banks, in the individual/group credit exposure norms on a case by case basis provided the bank's total exposure to the borrower, net of its exposure due to acquisition of PSU shares under the disinvestment programme, is within the prudential individual/group borrower exposure ceiling prescribed by it. These clarifications came in response to a circular issued in August 1998, wherein the RBI had stated that the promoters' contribution towards the equity capital of a company should come from their own resources and a bank should not normally grant advances to take up shares of other companies. Banks were to ensure that advances against shares were not used to enable the borrower to acquire or retain a controlling interest in the company/companies or to facilitate or retain inter-corporate investment. Banks in turn asked the RBI whether they could finance the successful bidders for acquisition of shares of PSUs under the government's disinvestment programme. 'It is clarified that the aforesaid instructions of the 1998 circular would not apply in the case of bank finance to the successful bidders under the PSU divestment programme of the government. The banks' proposals for financing the successful bidders should be approved by their directors, bank finance should be for acquisition of shares of PSU under a disinvestment programme approved by the government, including the secondary stage mandatory open offer, wherever applicable and not for subsequent acquisition of the PSU shares,' the RBI said today.