Overview
- Financial Services Secretary M. Nagaraju said inter-ministerial consultations are underway on a proposal to permit up to 49% foreign holding in public sector banks.
- Public sector banks currently face a 20% foreign investment ceiling, compared with up to 74% allowed in private banks with 49% via the automatic route.
- A 15% limit applies to any single foreign institution in Indian banks unless the Reserve Bank of India grants a relaxation.
- State-run lenders have raised about Rs 45,000 crore recently and expect to mobilise Rs 45,000–50,000 crore next year, with assets projected to double over five years, according to the secretary.
- The government wants three to four large banks able to support bigger loans, and it expects to invite financial bids for IDBI Bank’s strategic sale this month or next.