Lok Sabha Unstarred Question No. 92, answered on Monday, December 1, 2025, concerns the acquisition of banks by foreign firms. Shri V K Sreekandan asked if the Government has decided to allow foreign firms to gradually acquire Indian banks and if the Government has received any proposals from foreign firms for acquiring a majority stake in Indian banks, seeking details thereof.
The Minister of State for Finance, Shri Pankaj Chaudhary, responded that as per extant guidelines/ Foreign Exchange Management (Non-Debt Instruments) Rules 2019, the Foreign Direct Investment (FDI) limit in Public Sector Banks (PSBs) is 20% and in Private Sector Banks is 74%. FDI is considered a major source of non-debt financial resource for economic development, contributing to technology transfer, strategic sector development, innovation, competition, employment, and supplementing domestic capital.
Key Entities Referenced
Foreign Direct Investment (FDI): Refers to investment made to acquire controlling interest in a business in another country, and its limits in Public and Private Sector Banks are being discussed.
Foreign Exchange Management (Non-Debt Instruments) Rules 2019: Guidelines providing the framework for foreign exchange management related to non-debt instruments, impacting foreign investment in banks.
Ministry of Finance: The central ministry responsible for answering questions related to acquisition of banks by foreign firms and related FDI policies.
Lok Sabha: Parliament of India where questions were raised.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION NO. 92
ANSWERED ON MONDAY, DECEMBER 1, 2025/AGRAHAYANA 10, 1947 (SAKA)
Acquisition of Banks
92. SHRI V K SREEKANDAN:
Will the Minister of FINANCE be pleased to state:
(a) whether it is a fact that the Government has decided to allow foreign firms to gradually
acquire Indian banks;
(b) if so, the details thereof;
(c) whether it is also a fact that the Government has received any proposals from foreign firms
for acquiring majority stake in Indian banks; and
(d) if so, the details thereof?
ANSWER
THE MINISTER OF STATE FOR FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) to (d) As per extant guidelines/ Foreign Exchange Management (Non-Debt Instruments)
Rules 2019, the Foreign Direct Investment (FDI) limit in Public Sector banks (PSBs) and Private
Sector Banks is 20% and 74% respectively. FDI is considered as a major source of non-debt
financial resource for the economic development leading to long term sustainable capital in the
economy and contributes towards technology transfer, development of strategic sectors, greater
innovation, competition and employment creation and supplement domestic capital, technology
and skills for accelerated economic growth and development.
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