To open up the banking sector, the government is mulling on a proposal to hike the FDI limit in both the public and private space from current 49% to 100% and 20% to 49% respectively.

The various dept's including the Department of Industrial Policy and Promotion (DIPP) and the Indian Banks' Association (IBA and finance ministry are weighing on the proposal. The private sector further has been allowed of 74% after approval from the government.

The proposal if implemented will augur well for the banking industry as the minimum capital requirement criteria shall be easily maintained and service delivery will also enhance.

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