Mizuho Financial Group will form a business tie-up with India's top bank, State Bank of India, a source said on Friday, as Japan's second-largest lender looks to capitalize on the growing Indian economy.
Japan's Nikkei and Yomiuri newspapers said that Mizuho's corporate banking arm and State Bank of India are set to sign and announce the deal in Mumbai later on Friday.
The two banks will not form capital ties at this time, the Nikkei daily said.
A Mizuho executive with direct knowledge of the deal confirmed the reports. The executive spoke on the condition of anonymity because the deal has not been officially announced.
A spokesman for Mizuho Corporate Bank, the group's corporate banking unit, declined to comment.
Last week Mizuho said it would invest $1.2 billion in subprime-hit brokerage Merrill Lynch, the first major investment by a Japanese bank in U.S. rival since 1989.
With ample access to funds and facing limited growth opportunities at home, Mizuho and other major Japanese banks have once again started to expand overseas.
The deal will help Mizuho provide financial services to Japanese firms looking to enter India, the reports said.
It will be the first time for one of Japan's three megabanks -- Mizuho, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group -- to enter a full-scale alliance with an Indian bank, the reports said.