Finance Minister Pankaj Chaudhary | Photo credit: Sansad TV/ANI Video Grab
“Currently, there is no proposal on merger or consolidation of public sector banks (PSBs) before the government,” Minister of State for Finance Pankaj Chaudhary said in a written reply in the Lok Sabha.
Replying to another question, he said, the limit for foreign direct investment (FDI) in PSBs and private sector banks is 20 percent and 74 percent respectively, as per the existing Guidelines/Foreign Exchange Management (Non-Debt Instruments) Rules 2019.
“FDI is considered an important source of non-debt financing for economic development, which leads to long-term sustainable capital in the economy and contributes to technology transfer, development of strategic sectors, increased innovation, competition and job creation and complements domestic capital, technology and skills for accelerated economic growth and development,” he said.
In a separate reply, Chaudhary said the disinvestment of IDBI Bank will be carried out as per the approval of the CCEA.
The Cabinet Committee on Economic Affairs (CCEA), at its meeting on May 5, 2021, has given ‘in principle’ approval for the strategic disinvestment, along with transfer of management control in IDBI Bank Ltd, of such extent of shareholding in the Government of India and LIC as may be decided in consultation with LIC and within the framework agreed upon by the RBI, he said.
As per the CCEA’s May 2021 approval for strategic disinvestments along with transfer of management control in IDBI Bank, he said, 60.72 percent of IDBI Bank’s equity is being offered for strategic disinvestments with transfer of management control, with the Government of India offering 30.48 percent (the remaining equity after the sale is 15 percent) and Life Insurance Corporation of India (LIC) offering 30.24 percent. cent equity before disinvestment (after the sale, LIC’s remaining equity is 19 percent).
As of March 2025, he said, IDBI Bank had outstanding capital and liabilities of about Rs 4.11 lakh crore, which were backed by total assets (tangible and intangible) of the same amount.
Replying to another question, Choudhary said the financial health of Regional Rural Banks (RRBs) has improved in recent years as they achieved the highest ever consolidated net profit of Rs 7,571 crore in FY24, followed by the second highest net profit of Rs 6,825 crore during FY25, he said.
This drop was due to the introduction of the pension scheme retroactively from November 1, 1993, and payments for the computer increase, he said.
He also said that the RRBs have shown consistent improvement in key financial parameters such as Capital to Risk Weighted Assets Ratio (CRAR), deposits, advances, Non-Performing Assets (NPA), Credit-Deposit Ratio (CD ratio), etc.
Published on December 1, 2025
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