Consolidated FDI Policy Circular of 2020

Paragraph 5.2.18 BANKING- PRIVATE SECTOR % of Equity Entry Route

Chapter: 5 · Sector Specific Conditions on FDI
Text as on: As issued 15 October 2020; Press Notes since are not applied

5.2.18 BANKING- PRIVATE SECTOR % of Equity Entry Route FDI Cap Sector/Activity Automatic up 5.2.18.1 74% to 49% Banking- Private Sector Government route beyond 49% and up

to 74%.

5.2.18.2 OTHER CONDITIONS

(1) This 74% limit will include investment under the Portfolio Investment Scheme (PIS) by /FPIs, NRIs and shares acquired prior to September 16, 2003 by erstwhile OCBs, and continue to include IPOs, Private placements, GDR/ADRs and acquisition of shares from existing shareholders.

(2) 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.

(3) The stipulations as above will be applicable to all investments in existing private sector banks also.

(4) Other conditions in respect of permissible limits under portfolio investment schemes through stock exchanges for /FPIs and NRIs, setting-up of a subsidiary by foreign banks and limits in respect of voting rights are at Annexure-8.

5.2.18 BANKING- PRIVATE SECTOR                      % of Equity    Entry Route
                                                      FDI Cap
                       Sector/Activity                            Automatic up
 5.2.18.1                                                74%          to 49%
 Banking- Private Sector
                                                                  Government
                                                                  route beyond
                                                                   49% and up

to 74%.

5.2.18.2 OTHER CONDITIONS

(1) This 74% limit will include investment under the Portfolio Investment Scheme (PIS) by
      /FPIs, NRIs and shares acquired prior to September 16, 2003 by erstwhile OCBs, and
      continue to include IPOs, Private placements, GDR/ADRs and acquisition of shares
      from existing shareholders.

(2) 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.

(3) The stipulations as above will be applicable to all investments in existing private sector
      banks also.

(4) Other conditions in respect of permissible limits under portfolio investment schemes
      through stock exchanges for /FPIs and NRIs, setting-up of a subsidiary by foreign banks
      and limits in respect of voting rights are at Annexure-8.