New Delhi, Aug. 26 -- State Bank of India (SBI) Chairman Challa Sreenivasulu Setty on Monday said the Indian Banks' Association (IBA) is preparing a formal recommendation to the Reserve Bank of India (RBI) seeking approval for banks to finance mergers and acquisitions (M&As), particularly in cases of listed companies where shareholders have cleared the deal.

Speaking at the FIBAC 2025 conference, Setty said the industry has long requested the regulator to allow such financing, noting that adequate safeguards on transparency and governance are in place.

The move, if approved, would mark a departure from the RBI's earlier caution driven by concerns over hostile takeovers, signalling a wider acceptance of bank-backed consolidation as a too...