FDI Limit in Public Sector Banks May Rise to 49% to Boost Capital

• The finance ministry is considering increasing the FDI limit in Public Sector Banks (PSBs) from 20% to 49%.
• The move aims to strengthen the capital base of public sector banks.
• Financial Services Secretary M Nagaraju confirmed inter-ministerial consultations are ongoing.
• Currently, private banks allow up to 49% FDI via the automatic route, with higher limits requiring government approval.
• Financial bids for IDBI Bank's strategic sale are expected soon, and India needs 3-4 large banks for economic growth.

Why It Matters: Government considers raising FDI in PSBs to 49% to enhance capital and support economic growth.