FDI cap for banking raised from 49% to 74%
Centurion Bank and Vysya Bank will be the immediate beneficiaries of the relaxation of foreign direct investments (FDI) in the banking sector. The budget has proposed to raise the cap from 49 per cent to 74 per cent for private sector banks.
Some of the foreign banks who were waiting in the fringes to have a stake in excess of 51 per cent in private sector banks will now be open to do so.
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A stake of 74 per cent will help these banks to merge the balance sheet with the overseas balance sheet. Foreign banks led by Citibank, Standard Chartered Bank, ABN Amro and HSBC have already said they would be open to take over a local bank.
The finance minister said: