Banking FDI slides sharply: Inflows drop from $898 million in FY23 to $115 million in FY25 | DETAILS

Foreign direct investment (FDI) equity inflow in the banking sector has declined from $898 million in FY23 to $115 million in FY25, Parliament was informed on Tuesday. Total FDI inflow includes equity inflow, equity capital of unincorporated bodies, re-invested earnings, and other capital, Minister of State for Finance Pankaj Chaudhary said in a written reply in the Rajya Sabha.

FDI is considered as a major source of non-debt financial resource for the economic development, he said. He further said, FDI flows into India have grown consistently since liberalization and are an important component of foreign capital since FDI infuses long term sustainable capital in the economy and contributes towards technology transfer, development of strategic sectors, greater innovation, competition and employment creation amongst other benefits, PTI reported.

As per Reserve Bank of India's (RBI) Master Directions on 'Acquisition and holding of shares or voting rights in Banking Companies', he said, share acquisition of a bank resulting in any person owning or controlling 5 per cent or more of the paid-up capital of the bank, requires prior approval of RBI, according to PTI.

The Reserve Bank of India has, from time to time, issued a number of instructions/ guidelines to banks to regulate Priority Sector Lending (PSL) which is applicable to all commercial banks unless otherwise provided, he added. Sharing details for foreign shareholding including FDI, FPI/FII/NRI/OCB holdings in public sector banks, Chaudhary said, foreign holding in State Bank of India (SBI) stood at 11.07 per cent at the end of March 2025, the highest in state-owned banks, as per PTI.

SBI was followed by Canara Bank with 10.55 per cent at the end of financial year 2024-25, Bank of Baroda at 9.43 per cent, Union Bank of India 7.48 per cent and Punjab National Bank at 5.85 per cent, he said.

The data is being uploaded by Member Lending Institutions (MLIs) on the Mudra portal, maintained by Mudra Ltd, he said. In another response, he said, the Securities and Exchange Board of India (SEBI) receives complaints from investors on various issues, including those relating to misleading claims and advice disseminated by unauthorised persons on social media platforms, PTI report stated.

"SEBI has been taking enforcement action, as per extant regulations, against entities providing unregistered investment advisory services, including issuance of enforcement and interim orders, wherever required. Such actions, inter alia, include directions for refund to aggrievedinvestors," he said. In the orders passed by SEBI with respect to unregistered investment advisory since 2024, the total amount disgorged is Rs 665.26 crore, he said. (With Agency Inputs)