IBA seeks funding acquisitions option

Mumbai: IndianBanks’ Association (IBA) will make a formal request to the regulator RBI to permit banks to fund mergers and acquisitions (M&As) of listed companies, State Bank of India (SBI) Chairman CS Setty said on Monday.

He also urged the private sector to commence investment for capacity expansion, as the government has already taken several steps to boost consumption.

“Access to the Indian banks for financing the Mergers and Acquisitions (M&A). I think we did speak earlier. If you see the historical perspective of this, not funding the acquisitions is based on the hostile takeover. To start with, we will make a formal request from the IBA (to the RBI) at least start with some listed companies where the acquisitions are more transparent and acquisitions are approved by the shareholders. Thus the issue of any hostile take over of the funding can be minimised,” said Setty, who is also chairman of IBA.

Speaking at FIBAC 2025, organised by the Federation of Indian Chambers of Commerce and IBA, he said the current capex of the corporate sector is being financed by their internal accruals, equity, and the debt market. He asked the corporate to come forward and make an investment towards capacity enhancement, as consumption is expected to pick up with the government taking steps in that direction.

“It is important for the corporate world to start looking at capacity expansion right away, which will definitely be supported both by the capital markets as well as debt markets through the banking system,” he said.