State Bank of India's (SBI's) chairman CS Setty on October 8 said that banks are well versed to do acquisition financing. "I think banks like SBI are well versed in acquisition financing," Setty said on the sidelines of the Global Fintech Fest 2025.
He also added that the bank has been doing outbound merger and acquisition financing for Indian corporates acquiring overseas entities.
On October 1, RBI proposed to provide an enabling framework for banks to finance acquisitions by Indian corporates. Setty had requested the central bank to allow banks to fund mergers and acquisitions on August 25.
On the Expected Credit Loss (ECL) front, Setty said that SBI is technologically ready in terms of models, but may be some adjustments are required based on the final guidelines.
"The long tranistion time that is given, we believe that there will be limited impact on the balance sheet of banks," Setty added.
ECL framework of provisioning for bad loans, with prudential floors, is proposed to kick in from April 1, 2027, the RBI governor Sanjay Malhotra had said on October 1, during the monetary policy announcement.
The norms will be applicable to Scheduled Commercial Banks (excluding Small Finance Banks (SFBs), Payment Banks (PBs), Regional Rural Banks (RRBs)) and All India Financial Institutions (AIFIs), the governor added.
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