No proposal for raising FII limit in PSBs to 49%: Thakur

There is no proposal for raising Foreign Institutional Investment (FII) ceiling in public sector banks to 49% from 20% for capital mobilisation, Minister of State for Finance Anurag Singh Thakur informed the Lok Sabha on Monday.

No amount has been raised by the government in the current financial year for recapitalisation of public sector banks (PSBs) through issuance of recapitalisation bonds, he said in a written reply.

“No proposal to amend this, is currently under consideration of the government,” he said while replying to a question if the government is mulling over raising FII in PSBs from 20 % to 49 % for capital mobilisation.

“As per the proviso to sub-section (2D) of section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980, no individual or company resident outside India shall hold shares exceeding 20 % of a nationalised bank’s paid-up capital,” he said.

Replying to another question, he said, the government and World Bank have so far signed only one loan of USD 750 million on May 15, 2020 as budgetary support to the Government for accelerating India’s COVID-19 Social Protection Response Programme in order to support measures undertaken under Pradhan Mantri Garib Kalyan Yojana (PMGKY), the benefits of which have flown to all States/UTs.

All beneficiaries covered under PMGKY are benefited from this loan, he said, adding, as on date, the signed loan amount (USD 750 million) has been fully disbursed under the programme.