Government to raise FDI cap in private banks

New Delhi: The Finance Minister, Mr Jaswant Singh, has said that the Government has in principle decided to enhance the limit of foreign direct investment (FDI) in banking companies.

In a reply to Parliament, Mr Singh said the hike in FDI would not have any impact in terms of ownership control and regulation of nationalised banks. However, he said the FDI hike would allow foreign banks to set up subsidiaries and would also invite greater foreign investment in private banks.

The Finance Minister did not indicate any fresh limit for FDI in the sector that currently stands at 49 per cent. The Government had recently said that it was committed to raise the FDI limit to 74 per cent as stated in the Budget for 2003-04.