FinMin Eyes 49% FDI in PSU Banks to Boost Capital, Growth

• The Finance Ministry is considering raising the FDI cap in Public Sector Banks (PSBs) from 20% to 49% to strengthen their capital base.
• Inter-ministerial consultations are ongoing regarding this proposal, as confirmed by Financial Services Secretary M Nagaraju.
• While the government's shareholding percentage has declined in some PSBs due to fresh share issuance, the number of shares held by the Union government has not decreased since 2020.
• PSBs have collectively raised approximately Rs 45,000 crore through various methods like QIP and offer for sale, with similar mobilization expected next fiscal year.
• Public sector banks are projected to double their asset size to around Rs 261 lakh crore by September 2025, and financial bids for IDBI Bank's strategic sale are expected soon.

Why It Matters: Finance Ministry plans to increase FDI in PSU banks to 49% to enhance capital and support significant growth.