Leading domestic lenders have started reaching out to their large corporate clients, including conglomerates, to position themselves for merger and acquisition (M&A) financing, after the Reserve Bank of India guidelines allowing banks to fund such deals came into effect on July 1.
State-owned banks are exploring partnerships with foreign banks, while private-sector peers are relying on existing corporate relationships to take part in M&A financing as deals materialise.
“We have our own corporate relationships and sufficient liquidity. When the opportunity arises, we will definitely participate. We are engaging with large corporate groups and are ready to finance acquisitions. We have already communicated this to our key corporate clients and conglomerates,” said a senior executive at a large private-sector bank. “We have been gaining a strong share of their business over the past year, and we are hopeful that when they go ahead with acquisitions, they will approach us,” he added.