Indian Government Consultations Under Way to Increase Foreign Investment Limit in State Run Banks to 49 Percent
The Indian government is holding consultations to increase the foreign investment cap in state-run banks. Official plans include major capital raising and divestment of key assets.
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The Indian government is holding inter-ministerial consultations to raise the foreign direct investment limit in state-run banks from 20% to 49% according to financial services secretary M Nagaraju m nagaraju. This proposal was discussed on Monday following the annual budget presentation by Finance Minister Nirmala Sitharaman nirmala sitharamanin India 
INyesterday. If approved, the move would more than double the existing cap on foreign ownership for public-sector lenders, aligning with broader efforts to attract international capital into the banking sector.
INyesterday. If approved, the move would more than double the existing cap on foreign ownership for public-sector lenders, aligning with broader efforts to attract international capital into the banking sector.Alongside the consultations on investment limits, M Nagarajustated that state-run banks are expected to launch a qualified institutional placement of shares worth approximately 500 billion rupees in fiscal 2026-27. This amount exceeds the 450 billion rupees planned for the current fiscal year. The government is also advancing its divestment agenda, with financial bids for IDBI Bank Limited expected to be received this month. Currently, the government owns 45.48% in IDBI Bank Limitedwhile the Life Insurance Corporation of India holds 49.24%. Together, they plan to sell a combined 60.7% stake in the lender, which was rescued by the Life Insurance Corporation of Indiain 2019 following a surge in bad loans.
