The Finance Ministry has proposed allowing foreign direct investment (FDI) of up to 49% in public sector banks (PSBs) and has sought the Reserve Bank of India’s (RBI) views on the plan, a senior government official confirmed Business Today TV on condition of anonymity.

Currently, foreign investment in PSBs is capped at 20%, while private banks can have up to 74% foreign ownership. “There is a proposal we are working on,” the official confirmed. Advertisement

India has 12 state-owned banks, which together hold assets worth around $1.95 trillion as of March, accounting for 55% of the country’s banking sector. According to sources, the government intends to retain at least a 51% stake in these banks, ensuring majority ownership even if the proposal goes through.

The move comes amid growin

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