{"id":1301896,"date":"2025-10-29T08:14:25","date_gmt":"2025-10-29T02:44:25","guid":{"rendered":"https:\/\/trak.in\/stories\/?p=1301896"},"modified":"2025-10-29T08:16:11","modified_gmt":"2025-10-29T02:46:11","slug":"govt-can-allow-upto-49-fdi-in-psu-banks-100-more-investment","status":"publish","type":"post","link":"https:\/\/trak.in\/stories\/govt-can-allow-upto-49-fdi-in-psu-banks-100-more-investment\/","title":{"rendered":"Govt Can Allow Upto 49% FDI In PSU Banks: 100% More Investment"},"content":{"rendered":"\n

India is considering allowing up to 49% direct foreign investment in state-run banks, which is more than double the current 20% cap, according to a person involved in the policy talks.<\/p>\n\n\n\n

\"Govt<\/figure>\n\n\n\n

The finance ministry has been in discussions with the Reserve Bank of India (RBI) about the proposal for the past few months, but the plan<\/a> has not yet been finalized.<\/p>\n\n\n\n

India Plans to Raise Foreign Investment Cap in State-Run Banks to 49%<\/h2>\n\n\n\n

Foreign interest in India\u2019s banking industry is increasing, as seen in Dubai-based Emirates NBD\u2019s $3 billion purchase of a 60% stake in RBL Bank and Sumitomo Mitsui Banking Corp\u2019s $1.6 billion acquisition of a 20% stake in Yes Bank, which was later raised by another 4.99%.<\/p>\n\n\n\n

State-owned banks are also drawing attention from overseas investors, and raising the foreign investment limit is expected to help them attract more capital in the coming years.<\/p>\n\n\n\n

Following the Reuters report on the proposed change, the Nifty PSU Bank index rose as much as 3.02% to a record high of 8053.4 and closed 2.22% higher.<\/p>\n\n\n\n

A second source confirmed that the increase from the current 20% limit is being discussed, noting that the move aims to align regulations for public and private banks.<\/p>\n\n\n\n

India currently allows foreign ownership of up to 74% in private sector banks, so the proposed 49% limit for state-run banks would help reduce the regulatory gap.<\/p>\n\n\n\n

The idea to raise the foreign investment cap for state-run banks to 49% has not been publicly reported before.<\/p>\n\n\n\n

Both sources requested anonymity because the discussions are not yet public, and neither the finance ministry nor the RBI responded to Reuters\u2019 requests for comment.<\/p>\n\n\n\n

India\u2019s Rapid Economic Growth Boosts Investor Interest in Banking Sector<\/h2>\n\n\n\n

India\u2019s strong economic growth\u2014averaging around 8% over the last three fiscal years\u2014has fueled rising credit demand, making the country\u2019s banking sector more appealing to investors.<\/p>\n\n\n\n

Deals in India\u2019s financial sector have surged 127% to reach $8 billion between January and September.<\/p>\n\n\n\n

India currently has 12 government-owned banks with combined assets of 171 trillion rupees ($1.95 trillion) as of March, accounting for 55% of the total banking sector.<\/p>\n\n\n\n

The government plans to maintain at least a 51% ownership stake in all state-run banks, according to the first source.<\/p>\n\n\n\n

Presently, government ownership in all 12 public banks is significantly higher than 51%.<\/p>\n\n\n\n

Foreign ownership in state-run banks varies widely, from around 12% in Canara Bank to nearly zero in UCO Bank as of September 30, based on stock exchange data.<\/p>\n\n\n\n

Public sector banks are generally considered weaker than private ones, as they are often required to lend to lower-income groups and open branches in rural areas, leading to higher bad loans and lower returns on equity.<\/p>\n\n\n\n

The RBI has recently taken several steps to ease regulations and has become more open to letting foreign banks hold larger stakes in Indian private lenders.<\/p>\n\n\n\n

However, safeguards will remain in place to prevent arbitrary control, including a cap that limits any single shareholder\u2019s voting rights to 10%, according to the first source.<\/p>\n","protected":false},"excerpt":{"rendered":"

India is considering allowing up to 49% direct foreign investment in state-run banks, which is more than double the current 20% cap, according to a person involved in the policy talks. The finance ministry has been in discussions with the Reserve Bank of India (RBI) about the proposal for the past few months, but the […]<\/p>\n","protected":false},"author":25,"featured_media":1301930,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[1891,8888],"class_list":["post-1301896","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-fdi","tag-foreign-investment"],"acf":[],"yoast_head":"\nGovt Can Allow Upto 49% FDI In PSU Banks: 100% More Investment - Trak.in - Indian Business of Tech, Mobile & Startups<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/trak.in\/stories\/govt-can-allow-upto-49-fdi-in-psu-banks-100-more-investment\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Govt Can Allow Upto 49% FDI In PSU Banks: 100% More Investment - Trak.in - Indian Business of Tech, Mobile & Startups\" \/>\n<meta property=\"og:description\" content=\"India is considering allowing up to 49% direct foreign investment in state-run banks, which is more than double the current 20% cap, according to a person involved in the policy talks. 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