SBI Partners with MUFG Bank to Enhance Corporate Financing Capabilities

State Bank of India and MUFG Bank Form Strategic Partnership

State Bank of India (SBI) has entered into a strategic partnership with MUFG Bank to collaborate on financing mergers and acquisitions, aviation, and real estate projects in support of Indian and global clients. The agreement was announced in a joint statement on Wednesday, following the Reserve Bank of India's issuance of final guidelines for banks to finance mergers and acquisitions on February 13.

Under the new rules, banks can fund up to 75% of a total deal value, but must ensure their total lending for such acquisitions does not exceed 20% of their core capital. The partnership deepens India-Japan financial ties and supports cross-border corporate activity.

SBI and MUFG will explore opportunities in structuring and financing transactions in sectors such as mergers and acquisitions, aviation, and real estate, while cooperating on mergers and acquisitions advisory, trade finance, and retail banking solutions. The collaboration will also support Japanese companies expanding operations in India and Indian firms looking to grow in overseas markets, including Japan.

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The tie-up combines SBI's large domestic banking network with MUFG's global reach and expertise in cross-border financial structuring, allowing both institutions to facilitate capital flows between the two countries. MUFG aims to provide integrated cross-border solutions that support both inbound investment into India and outbound expansion by Indian corporates.

Key Highlights:

• ₹94,000 crore: The amount of funds that SBI has the ability to disburse to borrowers looking at acquisition financing, according to a report by Press Trust of India.
• February 13: The date on which the Reserve Bank of India issued the final guidelines for banks to finance mergers and acquisitions.
• 20%: The maximum percentage of core capital that banks can use for lending on mergers and acquisitions.
• 75%: The maximum percentage of deal value that banks can fund under the new rules.