The State Bank of India (SBI.NS), the country’s largest lender by assets, has approached the Reserve Bank of India (RBI) seeking permission for banks to finance mergers and acquisitions, Chairperson Challa Sreenivasulu Setty said on Monday.

At present, RBI regulations prohibit banks from directly funding acquisition deals, forcing companies to depend on non-banking finance firms or issue bonds to raise capital.

Speaking at an industry event, Setty said SBI has urged the central bank to consider permitting acquisition financing, at least for large, listed corporations in the initial phase.