In a major policy signal that could reshape India’s corporate financing landscape, State Bank of India (SBI) Chairman CS Setty has announced the bank’s willingness to collaborate with foreign banks for acquisition financing, following the Reserve Bank of India’s recent move to allow domestic banks to fund corporate acquisitions. This marks a strategic shift for India’s largest lender, which has traditionally focused on outbound acquisition finance and now seeks to expand its footprint in domestic M&A transactions.
Speaking to reporters on November 4, 2025, Setty acknowledged that multinational banks currently dominate the acquisition finance space. However, he emphasized that SBI’s deep understanding of Indian corporates and its in-house investment banking arm, SBI Capital Markets, position it well to support complex acquisition deals.
🧠 SBI’s Acquisition Finance Strategy – Key Highlights
| Strategic Element | Description |
|---|---|
| RBI Policy Shift | Local banks now permitted to fund domestic acquisitions |
| SBI’s Position | Open to partnerships with foreign banks for joint financing |
| Competitive Landscape | MNC banks currently lead acquisition finance in India |
| SBI’s Capabilities | Strong domestic corporate insights, SBI Capital Markets expertise |
| Future Outlook | Focus on strategic deals, not just transactional lending |
Setty’s remarks reflect SBI’s intent to play a more active role in India’s growing M&A ecosystem.
📊 Timeline of Acquisition Finance Developments
| Date | Event Description | Outcome |
|---|---|---|
| Oct 2025 | RBI announces policy change | Domestic banks allowed to fund acquisitions |
| Nov 4, 2025 | SBI Chairman CS Setty responds | Signals openness to foreign bank tie-ups |
| Dec 2025 | Expected launch of revamped YONO app | Enhanced digital banking capabilities |
| Q1 2026 | Anticipated M&A surge in mid-cap sector | Increased demand for acquisition financing |
The timing aligns with India’s post-pandemic economic rebound and rising corporate consolidation.
🗣️ Reactions from Industry Stakeholders
| Stakeholder | Commentary Summary |
|---|---|
| CS Setty (SBI Chairman) | “We don’t mind collaborating with MNC banks.” |
| Investment Bankers | “SBI’s entry could democratize acquisition finance.” |
| Corporate CFOs | “More options mean better deal structuring.” |
| Foreign Banks | “Open to joint mandates with SBI.” |
The move is expected to increase competition and improve access to structured financing.
📌 SBI’s Competitive Edge in Acquisition Finance
| Capability | Strategic Advantage |
|---|---|
| Domestic Corporate Network | Deep relationships with Indian businesses |
| SBI Capital Markets | Investment banking expertise for deal structuring |
| Risk Management Framework | Proven track record in large-scale lending |
| Regulatory Compliance | Strong alignment with RBI norms |
SBI’s infrastructure and experience make it a credible player in this space.
📌 Conclusion
State Bank of India’s openness to partnering with foreign banks for acquisition financing signals a new chapter in India’s financial sector. With the RBI’s policy shift enabling domestic banks to participate in M&A funding, SBI is poised to leverage its strengths and collaborate with global institutions to support strategic corporate growth. As India’s economy continues to expand, this move could unlock new opportunities for businesses seeking capital for transformative deals.
Disclaimer: This article is based on publicly available statements, financial news reports, and regulatory updates. It is intended for informational and editorial purposes only and does not constitute financial or investment advice.
