The government is mulling raising the foreign direct investment (FDI) limit in public sector banks (PSBs) from 20 per cent to 49 per cent, according to multiple reports.
Reports claim that the Finance Ministry has prepared a draft Cabinet note for increasing the FDI limit in PSBs and has sought comments from other ministries on the proposed increase.
The Reserve Bank of India (RBI) has backed the proposal and has also recently written to the government recommending that an increase in the FDI limit be considered at the earliest, the reports said.
However, as of now, the FDI limit is 74 per cent in private sector banks compared with just 20 per cent in PSBs. Among the 12 PSBs, SBI has the highest FDI holding at 11.07 per cent, followed by Canara Bank at 10.55 per cent.
There has been no official announcement from the Finance Ministry and the RBI so far.
Meanwhile, FDI flows into India recorded a 6 per cent increase to $19.81 billion in the April-June quarter of the current financial year compared to $18.62 billion in the same quarter of 2025-26, despite global uncertainties, according to DPIIT data.
Month-wise, FDI inflows nearly doubled to $12.1 billion in April from $6.6 billion in the same month last year, before declining to $2.8 billion in May and recovering to $4.91 billion in June.
Services attracted the highest inflows at $7.04 billion, followed by computer software and hardware ($2.84 billion), trading ($1.92 billion), non-conventional energy ($1.24 billion) and auto ($622 million).
Total FDI, including equity inflows, reinvested earnings and other capital rose about 22 per cent to $30.65 billion during April-June 2026-27.
Tamil Nadu led with $5.95 billion in FDI during the quarter, followed by Maharashtra ($4.22 billion), Delhi ($2.67 billion), Karnataka ($2.11 billion) and Gujarat ($1.3 billion).
