The Narendra Modi government is mulling to allow 100% Foreign Direct Investment in the banking sector and the Finance Minister may soon approach the Prime Minister’s Office for its approval, CNBC-TV18 reported. The Finance Ministry, DIPP and IBA are presently discussing and accessing the hike in FDI cap in the banking sector from 74% to 100%. The government may also hike FDI in Public Sector Banks (PSBs) to 49%, the news channel reported quoting sources.
Last week, announced a major easing of FDI norms for the aviation sector, allowing 100% foreign direct investment into Indian airline operators under the automatic route, even as the talks around selling a stake in the national carrier Air India continue to gather steam. Cabinet approved investment up to 49% under approval route in Air India. “Foreign airlines allowed to invest up to 49 percent under approval route in Air India,” the statement said.
As per the policy, foreign airlines are allowed to invest under government approval route in Indian companies operating scheduled and non-scheduled air transport services, up to the limit of 49 percent of their paid-up capital. However, the provision was not applicable to Air India, thereby implying that foreign airlines could not invest in Air India. “It has now been decided to do away with this restriction and allow foreign airlines to invest up to 49 percent under approval route in Air India,” it added.
This condition was relaxed subject to certain conditions. The statement said that foreign investment in Air India including that of foreign Airline (s) shall not exceed 49 percent either directly or indirectly and “substantial ownership and effective control of Air India shall continue to be vested in Indian National.”
The Cabinet also eased norms for investment in single-brand retail, construction and power exchanges. The government has also relaxed foreign direct investment (FDI) policy for medical devices and audit firms associated with companies receiving overseas funds.