The government has concluded inter-ministerial consultations on a proposal to significantly raise the foreign direct investment (FDI) limit in state-run banks, people familiar with the development told . A cabinet note is expected to be floated by the ministry of finance shortly, potentially within this financial year, marking a decisive step towards opening up public sector banks (PSBs) to greater overseas capital. Advertisement

While the move may not be announced in the Union Budget, sources said it could be taken up for Cabinet consideration even before the budget is presented. The proposal under discussion seeks to raise the foreign ownership cap in government-owned banks to as much as 49%, from the current limit of 20%, while ensuring the government retains a minimum 51% stake.

The

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