The Union Government is reported to be contemplating raising the Foreign Direct Investment (FDI) limit in Public Sector Banks (PSBs) from 20 percent to 49 percent.
As per media reports, the Finance Ministry has already drafted a Cabinet note for increasing the FDI limit in PSBs and has sought comments from other ministries on the proposed hike.
The Reserve Bank of India (RBI) is also said to have actively supported the proposal by writing to the Centre recommending that an increase in the FDI limit be considered at the earliest.
Currently, the FDI limit in private sector banks is 74 percent, while it is just 20 percent in PSBs. Among the 12 PSBs, SBI has the highest FDI holding at 11.07 percent, followed by Canara Bank at 10.55 percent.
However, there has been no official announcement regarding the hike either from the Finance Ministry or the RBI so far.
According to DPIIT data, FDI flows into India registered a 6 percent increase to USD 19.81 billion in the April-June quarter of the current financial year compared to USD 18.62 billion in the same quarter of 2025-26, despite global uncertainties.
Interestingly, services recorded the highest inflows at USD 7.04 billion, followed by computer software and hardware (USD 2.84 billion), trading (USD 1.92 billion), non-conventional energy (USD 1.24 billion) and auto (USD 622 million).
Among the states, Tamil Nadu topped the chart with USD 5.95 billion in FDI during the quarter, followed by Maharashtra (USD 4.22 billion), Delhi (USD 2.67 billion), Karnataka (USD 2.11 billion) and Gujarat (USD 1.3 billion).
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