The SBI Chairman, CS Setty, has confirmed to CNBC-TV18 that the FII limit in government-owned banks needs to be raised, as the current 20% cap in PSBs compares poorly with their private sector peers, where the composite investment limit is 74%.

While players like HDFC and ICICI , among others, have foreign holdings of over 55% with much better valuations despite being smaller in scale, in Indian public sector banks, the FII holdings range between 0.3% and 10%, with SBI having the highest.

Speaking on the issue, the SBI Chairman told CNBC-TV18, “I think it is not really helping in terms of recognising the true value of public sector banks … most of the FIIs look for the free space available for them and just compare a 10% free space available versus a 74%, which is looked at.”

Sett

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