Archive · 13 Dec 2025
SBI Adopts Calibrated Approach for M&A Funding
SBI, the biggest bank in India, is being careful and thoughtful when helping companies buy other companies.
The bank's boss, CS Setty, said they will take a slow and steady approach, just like they did with home loans.
The bank will work with other big banks and use its own rules to make sure everything is safe.
The bank is also doing well with loans for regular people, farmers, and small businesses, and it expects to grow its loans by 14% this year.
The central bank of India recently lowered interest rates to help the economy grow faster.
SBI has also made loans cheaper by reducing its lending rates, which will help both new and existing borrowers.
The bank has also lowered the rates for some of its savings schemes.
SBI will adopt a calibrated approach for funding mergers and acquisitions, as permitted by the RBI.
The bank will follow board-defined risk policies and collaborate with multinational banks for M&A financing.
SBI expects 14% overall credit growth for the current fiscal year, driven by the RAM segment.
The RAM segment, which includes retail, agriculture, and MSME loans, has crossed ₹25 lakh crore.
The RBI has lowered the repo rate to 5.25%, aiming to bolster economic growth.
- Who
- State Bank of India (SBI) and Reserve Bank of India (RBI)
- What
- SBI adopts a calibrated approach for funding mergers and acquisitions and reduces lending rates following RBI's policy easing
- When
- Guidelines and rate changes effective December 15, 2025
- Where
- India
- Why
- To support economic growth and make loans more affordable
Pro-Growth Stance
Risk-Conscious Approach
Economic Stimulus
Pro-Growth Stance
The RBI's rate cuts and SBI's lending rate reductions are seen as positive steps to stimulate economic growth and make loans more affordable.
Risk-Conscious Approach
Some argue that lowering rates too quickly could lead to inflationary pressures and financial instability.
- SBI Chairman
- CS Setty
- RBI Guidelines
- Allow banks to fund M&A up to 70% of acquisition value
- SBI's Risk Approach
- Risk-focused and collaborative
- Credit Growth Target
- 14% for the current fiscal year
- RAM Segment
- 67% of total loan portfolio, crossed ₹25 lakh crore in September
- Repo Rate
- Lowered to 5.25% by RBI
- Economic Growth
- 8.2% in Q2 of FY26
- EBLR Rate
- 7.90% effective December 15, 2025
- MCLR Rate
- 8.70% for one-year tenor effective December 15, 2025
- Base Rate/BPLR
- 9.90% effective December 15, 2025
- Fixed Deposit Rate
- 6.40% for 2–3 year maturity bucket
- Amrit Vrishti Rate
- 6.45% for 444-day special deposit scheme effective December 15, 2025
Sources
Calibrated approach to be adopted for funding M&A: SBI Chairman
SBI cuts FD, MCLR and EBLR rates after RBI’s 25-bps repo reduction
SBI cuts lending rates by up to 25 bps after RBI policy easing
SBI revises term deposit rates, reduces lending rates — check details
SBI reduces lending rates after RBI rate cut
