Let us know from the Financial Services Secretary four big things which are important for the banking sector and investors:

1. Preparation for 49% foreign investment in government banks

The government is considering increasing the FDI limit in public sector banks to 49% from the current 20%. M. Nagaraju said that this step can be taken to strengthen the capital base of banks and currently discussions are going on between the ministries. At present, up to 74% FDI is allowed in private banks, whereas in government banks this limit is only 20%.

2. Banks will double in the next five years

The government’s vision is to double the asset size (total assets) of public sector banks in the next five years.

• By the end of September 2025, the total assets of these banks were about Rs 261 lakh crore.




• Banks have raised about Rs 45,000 crore from the market last year and they plan to raise another Rs 45,000 to Rs 50,000 crore in the next financial year.

3. Disinvestment in IDBI Bank soon

There is good news for investors waiting for the privatization of IDBI Bank. Financial Services Secretary said that financial bids will be invited for the sale of the bank this month or next month.

• The government and LIC together are selling their total 60.72% stake in the bank.




• Investors interested in buying have received security clearance from the Home Ministry and have also been declared ‘fit and proper’ by the RBI.

4. The country needs three-four giant banks

The government believes that a huge economy like India needs a few very big banks instead of many small banks. Secretary Nagaraju clearly said that considering the size of our country, we need three to four big banks.