(a) whether the foreign holdings in banks have been reduced by the Government / Reserve
Bank of India (RBI);
(b) if so, the details thereof alongwith the percentage by which it has been reduced and
the reasons therefor;
(c) the likely impact of such reduction on the establishment of domestic banking bodies; and
(d) the steps taken / likely to be taken by the Government / RBI in this regard?
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI NAMO NARAIN MEENA)
(a) to (d): No, Sir. Recently, the Government / Reserve Bank of India (RBI) have not issued
any instructions / guidelines reducing foreign holding in the banks. However, in its draft
guidelines for licensing of new banks in the private sector, RBI has stated that the aggregate
non-resident shareholding from FDI, NRIs and FIIs in the new private sector banks shall not
exceed 49% for the first 5 years from the date of licensing of the bank. No non-resident
shareholder, directly or indirectly, individually or in groups, will be permitted to hold
5% or more of the paid up capital of the bank. After the expiry of 5 years from the date of
licensing of the bank, the foreign shareholding would be as per the extant policy. Currently,
foreign shareholding in private sector banks is allowed up to a ceiling of 74% of the paid up
capital.