The State Bank of India (SBI), the largest lender in the country, announced that it has entered into a strategic partnership with MUFG Bank of Japan to investigate collaboration on project structuring and financing, targeting areas like mergers and acquisitions (M&A), aviation, and real estate finance, to assist both Indian and international clients.

The statement follows weeks after SBI Chairman C S Setty mentioned discussions with Japanese lenders regarding partnership for M&A financing due to new regulations introduced by the Reserve Bank of India (RBI). SBI's lending limit is set at Rs.94,000 crore based on the updated regulations.

“The banks will assist in connecting Indian mid-corporates and micro, small, and medium enterprises (MSMEs) with Japanese corporate clients by pinpointing financing opportunities that enhance collaboration at the transaction level,” the bank mentioned in a statement.

Moreover, SBI will collaborate on M&A advisory, trade finance, and retail banking services, enabling potential inbound and outbound transactions linked to Japanese corporations by utilizing its profound knowledge of the Indian market and MUFG’s vast global network, it stated.

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The collaboration between SBI and MUFG will utilize the combined strengths of both organizations to enable cross-border capital movements, establish new synergistic financing prospects, and promote sustainable economic development in two of Asia's largest economies.

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“India represents one of the most compelling growth markets globally, and the India-Japan corridor continues to deepen. We are witnessing strong momentum from Japanese companies expanding their presence in India, alongside increasing global ambition from Indian enterprises. Through our partnership with SBI, MUFG aims to provide integrated cross-border solutions that support both inbound investment into India and outbound expansion by Indian corporates,” says Takuya Senoo, regional executive for India & Sri Lanka, MUFG Bank, adding that this collaboration with SBI reflects MUFG’s long-term commitment to strengthening economic ties between Japan and India.

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The alliance enhances the growing history of cooperation between MUFG Bank and SBI. SBI recently introduced a $500 million syndicated gender loan facility featuring a green-shoe option, organized by MUFG, designed to promote women’s economic empowerment. In early 2023, MUFG served as the primary coordinator and arranger for SBI’s $1 billion debut social loan, marking one of the largest such loans obtained by a bank in the Asia-Pacific area.