Minister of State for Finance Anandrao V Adsul today said the government was planning to permit higher foreign direct investment (FDI) in public sector banks, but there was no proposal to raise the foreign investment cap in the insurance sector to 49 per cent from 26 per cent.
Finance Minister Jaswant Singh had already announced in the Budget for 2003-04 that the FDI cap for private banks would be raised from 49 per cent to 74 per cent. The steering committee headed by Planning Commission Member N K Singh had recommended that the government raise the foreign investment cap in the insurance sector from 26 per cent to 49 per cent. In case of public sector banks, the government has capped the foreign holding at 20 per cent.
Speaking to reporters on the sidelines of a ceremony for signing memorandum of understanding between the Vijaya Bank and National Insurance Company, the minister said the government was considering converting the Industrial Development Bank of India (IDBI) into a bank and was contemplating a merger of IFCI Ltd and the Industrial Investment Bank of India.
