India plans to more than double the current limits on foreign direct investment in state-owned banks.
Foreign interest in the Indian banking sector is increasing, as evidenced by Dubai-based Emirates NBD’s $3 billion purchase of a 60 percent stake in privately held RBL Bank.
Currently, India allows 74 percent foreign investment in private banks but limits shareholding in a single foreign institution to 15 percent unless the Reserve Bank of India grants an exemption.
The Asian country plans to more than double current limits on foreign direct investment in state-owned banks, Nagaraju said. Increasing the foreign ownership limit will help them raise more capital in the coming years. Reuters reported last year.
In addition, India’s state-owned banks will launch qualified institutional placements (QIP) of equity worth around ₹50,000 crore ($5.46 billion) in the financial year 2026-27 (April-March), higher than the planned ₹45,000 crore in the current fiscal year, Nagaraju said.
He was speaking to reporters in New Delhi a day after Finance Minister Nirmala Sitharaman presented the country’s annual budget.
New Delhi could also make a bid next year to sell part of its stake in insurance giant Life Insurance Corporation, he added.
The Indian government will also seek financial bids for IDBI Bank this month, Nagaraju said.
The government, which owns 45.48 percent of IDBI Bank, and state-owned LIC, which holds 49.24 percent, together plan to sell 60.7 percent of the lender. IDBI Bank had to be bailed out by the state insurer in 2019 after a sharp increase in the number of bad loans at the lender.
Published on February 2, 2026
#Government #talks #increase #foreign #direct #investment #stateowned #banks