State Bank of India (SBI) is in discussions with Japanese banks for a collaboration in acquisition finance. SBI aims to leverage new RBI guidelines, allowing up to 75% lending per deal with a 20% core capital cap. SBI Mutual Fund also plans an IPO by September.

SBI Eyes Acquisition Finance Tie-up with Japanese Banks

State Bank of India Seeks Japanese Partners for Acquisition Finance Business

Following a recent decision by the Reserve Bank of India (RBI) to allow domestic banks to enter the lucrative acquisition finance sector, State Bank of India (SBI) is in talks with Japanese lenders to collaborate on the business.

RBI's Guidelines for Acquisition Finance

The RBI's new guidelines, effective from February 13, permit banks to fund up to 75% of a transaction, with a total exposure cap of 20% of the bank's core capital.

Expansion of SBI's Financing Capabilities

According to Chairman C S Setty, the country's largest lender, SBI, can now extend up to Rs 94,000 crore in financing to borrowers interested in acquisition finance.

International Collaboration and Domestic Priorities

SBI intends to prioritize simpler equity and debt finance transactions, moving cautiously in the new domestic landscape.
The bank's ongoing talks with Japanese banks reflect possible international collaboration, especially given Japan's active role in the sector.