SBI Open To Partnerships With Foreign Banks For Acquisition Financing: Chairman

State Bank of India’s Chairperson CS Setty on Tuesday said that the country’s largest lender is open to collaborating with foreign banks once the Reserve Bank makes it possible for local banks to do acquisition finance.

Weeks after the central bank announced its intent to allow Indian banks to fund companies for executing domestic acquisitions, Setty acknowledged that the “MNC (multinational companies) banks” are dominant in the space.

“Yes, I think some of the MNC banks are very well into this activity. We don’t mind collaborating with them,” Setty said as quoted by news agency PTI.

He said that SBI has always been doing outbound acquisition finance and has also gained considerable expertise in this aspect. He further said that SBI can also use

its in-house investment banking unit SBI Capital Markets’ expertise for such deals.

State Bank of India is well-positioned to support outbound financing due to its deep understanding of domestic corporates, the SBI chairman added.

Setty added that the bank is still evaluating the Reserve Bank of India’s recent decision permitting acquisition financing and will finalise its stance shortly.

However, Setty noted that SBI has reservations about the RBI’s proposal to limit total M&A-related lending to 10% of a bank’s core capital. He said SBI, through the Indian Banks’ Association, plans to take up the matter with the regulator. He also clarified that any future merger and acquisition financing will be handled by the bank’s existing corporate finance division, and there are no plans to create a separate vertical for this purpose.

Meanwhile, Setty said that it will be launching a newer version of its mobile application Yono by the end of December this year, and added that it will be a completely revamped version of the app.

The bank is targeting to more than double the overall number of mobile banking users to 20 crore in an unspecified time, and the new version of the app will be able to handle the traffic that comes through it, Setty said

(With inputs from PTI)