State Bank of India (SBI) is preparing to dive deeper into acquisition financing, following the Reserve Bank of India's recent green light in a significant
shift for India’s banking landscape. SBI Chairman C S Setty expressed confidence in the bank’s ability to manage this expansion. “We have been doing outbound merger and acquisition financing for Indian corporates acquiring overseas entities. I think banks like SBI are well versed in acquisition financing,” he said at the Global Fintech Fest (GFF), according to a PTI report. Interestingly, the RBI’s move comes shortly after Setty himself had advocated for this policy change in a public forum, signalling a responsive regulatory environment and a growing appetite for strategic lending. Transition To ECL Won’t Hurt Balance Sheets, Says SBI Addressing the impending shift from the current incurred loss model to an Expected Credit Loss (ECL) framework, Setty reassured stakeholders that banks have enough time and readiness to manage the change. “The long transition time that is given, we believe that there will be limited impact on the balance sheet of banks,” he noted. The transition will begin in FY27, with a five-year window to fully implement the framework, allowing banks ample time to adjust systems and internal models. UPI Lending, Jan Dhan, And The New Yono: SBI’s Digital Push Setty also touched on SBI’s efforts to enhance credit delivery through UPI, particularly for merchants and farmers. The bank is piloting receivables-based vendor financing and exploring ways to link Kisan Credit Cards (KCCs) with the RuPay UPI credit solution. Notably, SBI Cards issues 34 per cent of RuPay UPI credit cards, which account for 16 per cent of total UPI spends. The chairman also highlighted the bank’s digital inclusion strides under the PM Jan Dhan Yojana, with 150 million accounts onboarded and over 35 lakh transactions daily. Despite this success, credit uptake remains limited, prompting plans to leverage the business correspondent network for micro-lending. In a move to boost its tech offerings, SBI is working with 12 fintech firms to revamp its Yono app, aiming to onboard 20 crore users on launch day. “The Yono app has helped reduce the time taken to onboard a customer to as little as 15 minutes, down from an hour earlier,” Setty said. He also emphasised the need for simplified KYC compliance, noting SBI’s ongoing coordination with regulators and the government.
