India plans to more than double current limits of direct foreign investment in state-run banks.
The Indian government is holding inter-ministerial consultations to raise the limit on foreign direct investment in state-run banks to 49 per cent from 20 per cent, India’s financial services secretary M Nagaraju told reporters on Monday.
Foreign interest in India’s banking industry is on the rise as evidenced for instance by Dubai-based Emirates NBD’s $3 billion purchase of a 60 per cent stake in private RBL Bank.
Currently, India allows 74 per cent foreign investment in private banks but limits shareholdings of any single foreign institution to 15 per cent unless the Reserve Bank of India grants an exemption.
The Asian nation plans to more than double current limits of direct foreign investment in state-run banks, Nagaraju said. Raising the foreign ownership limit will help them gain more capital in the coming years, Reuters reported last year.
Separately, India’s state-run banks will launch qualified institutional placement (QIP) of shares worth about ₹50,000 crore ($5.46 billion) in the fiscal 2026-27 year (April-March), more 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 nation’s annual budget.
New Delhi may also launch an offer next year to sell a portion of its stake in the insurance behemoth Life Insurance Corporation, he added.
The Indian government will also get financial bids for IDBI Bank this month, Nagaraju said.
The government, which owns 45.48 per cent in IDBI Bank, and state-owned LIC which holds 49.24 per cent, together plan to sell 60.7 per cent of the lender. IDBI Bank had to be rescued by the state-owned insurer in 2019 after a surge in bad loans at the lender.
Published on February 2, 2026
