FDI in Banking Sector Falls to $115 Million in FY25
Foreign direct investment (FDI) in the banking sector has seen a sharp decline over the last few years. According to a report presented to Parliament on Tuesday, FDI equity inflows dropped from $898 million in FY23 to $115 million in FY25.
Pankaj Chaudhary, the Minister of State for Finance, shared these details in a written reply to the Rajya Sabha. He explained that total FDI includes equity capital, reinvested earnings, and other forms of capital.
The Importance of Foreign Investment
The Minister noted that FDI is a vital source of funding for economic growth. Since India opened its markets, these investments have grown consistently. FDI is important because it provides long-term capital and helps with:
- Transferring new technologies
- Developing strategic industries
- Encouraging innovation and competition
- Creating more jobs
RBI Rules on Bank Ownership
Under the Reserve Bank of India (RBI) guidelines, there are strict rules for owning bank shares. If any person or group wants to acquire 5% or more of a bank’s total capital, they must get prior approval from the RBI. Additionally, the RBI continues to issue guidelines to regulate Priority Sector Lending for all commercial banks.
Foreign Ownership in Public Sector Banks
The Minister also shared data on foreign shareholding in public sector banks. This includes investments from foreign individuals and institutional investors. At the end of March 2025, the State Bank of India (SBI) had the highest foreign holding among state-owned banks at 11.07%.
Other banks with significant foreign holdings include:
- Canara Bank: 10.55%
- Bank of Baroda: 9.43%
- Union Bank of India: 7.48%
- Punjab National Bank: 5.85%
Updates on Mudra Loans
In a separate update, the Minister discussed the Pradhan Mantri Mudra Yojana (PMMY). As of January 2, 2026, more than 56.31 crore Mudra loan accounts have been opened. Total disbursements have reached ₹37.31 lakh crore since the scheme began. All lending data is regularly updated on the official Mudra portal.
SEBI Action Against Unregistered Advisors
Finally, the Minister addressed investor protection. The Securities and Exchange Board of India (SEBI) has been receiving complaints about misleading financial advice on social media.
SEBI is taking legal action against unauthorized individuals offering investment advice. These actions include ordering refunds for affected investors. Since 2024, SEBI has recovered and ordered the return of ₹665.26 crore from unregistered advisors.
Also Read : Trump Criticized Epstein and Maxwell During Initial Investigation, Records Reveal
