FDI in PSU Banks: DFS Secretary Nagaraju Confirms Talks to Raise Limit to 49%

• DFS Secretary M Nagaraju stated on February 2 that inter-ministerial consultations are underway to increase the FDI limit in PSU banks from 20% to 49%.
• The proposal is under active consideration, driven by the capital requirements of public sector banks.
• This contradicts a December 2025 statement by MoS Finance Pankaj Chaudhary, who denied any such proposal.
• Nagaraju also highlighted the Budget 2026's focus on manufacturing and services, aiming to boost GDP contribution and employment.
• PSU banks are projected to launch QIPs worth Rs 50,000 crore in FY27, and the government plans to sell a stake in LIC and receive bids for IDBI Bank.

Why It Matters: Government is actively discussing raising FDI in PSU banks to 49% to meet capital needs, despite past denials.