No proposal to increase FDI ceiling in banks
The government has clarified that there is no proposal to raise foreign investment limit in the banking sector.
What is the current status of foreign investment in banking sector?
Currently, the aggregate foreign investment (FDI, FII and NRI) cannot be more than 74% in private sector banks while the limit is at 20% for nationalized banks, State Bank of India and its associate banks.
What is the status of FDI in insurance sector?
The government intends to increase the FDI limit in insurance sector. For this it introduced the Insurance Laws Amendment Bill, 2008 in Parliament to increase it from current 26% to 49%. The coverage of life insurance in India has enhanced from 2.15% in 2001 to 3.17% which is above Brazil, Russia, Malaysia, Pakistan, China, Sri Lanka, Australia and Germany. However, the penetration is below France, Switzerland, the UK, the US, Japan, Singapore, South Korea, Taiwan and Hong Kong.