SBI Open to Collaboration with Foreign Banks for Acquisition Finance

State Bank of India (SBI) Chairperson C.S. Setty announced that the bank is open to collaborating with multinational banks for acquisition financing if the Reserve Bank of India (RBI) grants permission for local banks to engage in such transactions. Speaking to the media, he explained why SBI is well-positioned for this move — citing its experience in outbound acquisition finance and the expertise of its investment banking arm, SBI Capital Markets, PTI reported.

SBI is presently reviewing the RBI’s recent decision that permits acquisition financing for Indian banks. The bank is assessing the finer details before finalising its approach. However, Setty expressed concerns over the RBI’s proposal to restrict merger and acquisition (M&A) lending to 10% of a bank’s core capital. He said SBI plans to raise this issue with the regulator through the Indian Banks’ Association (IBA).

Setty clarified that SBI will continue to manage M&A financing through its corporate finance division and has no plans to form a separate vertical for this purpose.

In addition, Setty revealed that SBI will launch a revamped version of its mobile banking app in the near future.

The development comes amid reports that the Government of India is considering increasing the foreign direct investment (FDI) limit in public sector banks from 20% to 49%. The move is reportedly aimed at attracting more global capital while ensuring that the government retains at least 51% ownership.

India’s public sector banks, which together hold assets worth around ₹171 trillion, account for about 55% of the country’s banking system. Despite ongoing reforms, safeguards such as the 10% voting rights limit for individual foreign shareholders will remain in place.