Confusion Over Fii Stake In Private Banks

By keeping portfolio investment out of the ceiling on foreign direct investment, capped at 49 per cent, the Reserve Bank of India appears to be saying that an Indian private bank can technically be 98 per cent foreign owned. But the finance ministry does not think so. A senior North Block official said foreign institutional investment continued to be part of the overall 49 per cent cap.

Bankers were, however, clear that the foreign stake in private banks could now go up to 98 per cent.