New Delhi: The foreign direct investment (FDI) limit in private banks has been raised to 74 per cent under the automatic route from the existing 49 per cent.

The guidelines notified yesterday by the Department of Industrial Policy and Promotion has, however, placed a limit of 49 per cent on foreign institutional investor (FII) holding within the overall FDI limit.

The notification said that the 74 per cent limit would include "aggregate foreign investment from all sources." This would include portfolio investment scheme by FIIs, non-resident Indian investment, investments by overseas corporate bodies, private placement, GDR/ADR, acquisition of shares from existing shareholders and investment made by any foreign investor in public offerings of the banking entity.

On the FII investment limit would ordinarily be 24 per cent. This could, however, be raised to 49 per cent by the board of directors of the bank passing a resolution followed by a special resolution by the general body. The 10 per cent limit for the holding of an individual FII has been retained.