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Govt actively conducting inter-ministerial discussions to enhance FDI in PSBs: Nagaraju
Feb-03-2026

Financial Services Secretary M Nagaraju has said that the Finance Ministry is actively conducting inter-ministerial discussions to enhance foreign direct investment (FDI) in public sector banks (PSBs) from the current 20 per cent to 49 per cent, to strengthen their capital base. 

Nagaraju said the FDI limit in PSBs and private sector banks is 20 per cent and 74 per cent, respectively. In case of private sector banks, up to 49 per cent of FDI is allowed through the automatic route, and beyond 49 per cent and up to 74 per cent, the government route is applicable. Even though the number of shares held by the union government in 12 PSBs has not declined since 2020, the respective percentage of its shareholding has declined in some of these banks due to the raising of capital through the issuance of fresh shares by banks. 

He further said that all the PSBs put together have raised about Rs 45,000 crore through various means, including qualified institutional placement (QIP) and offer for sale. He said banks would be mobilising about Rs 45,000-50,000 crore in the next financial year as well, given their growth trajectory. Providing an outlook for growth, he said, public sector banks are expected to double their asset size in the next five years. He said the decision was taken in consultation with the banks last year, and added that the combined assets of these banks were around Rs 261 lakh crore at the end of September 2025.     
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