Banks well versed in acquisition financing, says SBI chairman

On October 8, SBI Chairman CS Setty stated that banks like SBI are well-equipped to handle acquisition financing. Speaking at the Global Fintech Fest 2025, he highlighted that SBI has been actively involved in outbound merger and acquisition financing for Indian companies acquiring overseas firms.

Earlier, on October 1, the RBI proposed a framework enabling banks to finance acquisitions by Indian corporates, following Setty’s request to the central bank on August 25 to allow banks to fund mergers and acquisitions.

Regarding the Expected Credit Loss (ECL) framework, Setty mentioned that SBI is technologically prepared with the necessary models but might need some adjustments once final guidelines are issued. He expressed confidence that the extended transition period will limit the impact on banks’ balance sheets.

RBI Governor Sanjay Malhotra, during the monetary policy announcement on October 1, said the ECL provisioning norms with prudential floors will come into effect from April 1, 2027. These rules will apply to Scheduled Commercial Banks, excluding Small Finance Banks, Payment Banks, Regional Rural Banks, and will also cover All India Financial Institutions.