SBI to adopt calibrated approach for M&A funding

• SBI Chairman C S Setty announced a calibrated, cautious approach to funding mergers and acquisitions, following recent RBI permission.
• The Reserve Bank of India's new guidelines allow banks to fund up to 70% of acquisition value for strategic equity stakes in listed companies, effective next fiscal year.
• SBI plans a risk-focused M&A strategy, collaborating with multinational banks and utilizing its experience in outbound acquisitions.
• The bank maintains its 3% net interest margin guidance and projects 14% overall credit growth for the current fiscal year, driven by the RAM segment.
• SBI's Retail, Agriculture, and MSME (RAM) segment, accounting for 67% of its loan portfolio, surpassed Rs 25 lakh crore in September.

Why It Matters: SBI's cautious entry into M&A funding impacts corporate growth and banking strategy.