Exclusive: Govt Finalises Consultations On Raising FDI Limit In PSU Banks

The government has completed inter-ministerial consultations on a proposal to raise the foreign direct investment (FDI) limit in public sector banks, paving the way for the next stage of approval. According to sources, a cabinet note on the proposed changes is expected to be circulated soon. The move is aimed at strengthening capital availability, improving competitiveness, and supporting long-term growth of state-run banks. While increasing foreign investment is being considered, the government is expected to retain management control and ensure adequate safeguards. The proposal assumes significance amid efforts to deepen reforms in the banking sector and enhance the ability of PSBs to meet future credit demand. A final decision will depend on cabinet deliberations once the note is formally presented.