BANKING AFFAIRS

Detailed explanation-1: -Notes: At present, FDI of up to 49 percent is allowed in private banks without the permission of the government, and upto 74 percent can be invested with the government’s approval.

Detailed explanation-2: -(b) The aggregate foreign investment in a private bank from all sources will be allowed up to a maximum of 74 per cent of the paid up capital of the Bank. At all times, at least 26 per cent of the paid up capital will have to be held by residents, except in regard to a wholly-owned subsidiary of a foreign bank.

Detailed explanation-3: -This would bring it in line with private sector banks, where 74% FDI is already permitted. A hike in foreign investment limit is being seen as one way to help the government push ahead with its plan to privatise state-owned banks as it would allow more investors to participate.

Detailed explanation-4: -In the case of defence manufacturing, the prevailing policy is to allow FDI upto 49% through automatic route, but as part of the Atmanirbhar Bharat, the government raised this limit to 74%. Defence FDI is subject to other conditions.

Detailed explanation-5: -(i) It would be made under the Government approval route. (ii) The 49% limit will subsume FDI and FII/FPI investment.