No plans for public sector banks merger? Government issues clarification; here’s what MoS detailed on FDIs, IDBI offloading & more

The authorities on Monday confirmed that there aren’t any ongoing discussions or plans concerning the restructuring or combining of public sector banks.Pankaj Chaudhary, minister of state for finance, in a written reply to the Lok Sabha dominated out any such consideration and clarified, “presently, no proposal on merger or consolidation of Public Sector Banks (PSBs) is under consideration of the Government.“ In response to a separate query, the minister additionally detailed the bounds on Foreign Direct Investment (FDI) within the banking sector. As per the Foreign Exchange Management (Non-Debt Instruments) Rules 2019, FDI in PSBs is capped at 20%, whereas non-public sector banks are permitted as much as 74 %.Highlighting the perform of abroad funding, he identified that “FDI is considered as a major source of non-debt financial resource for the economic development, leading to long-term sustainable capital in the economy and contributes towards technology transfer, development of strategic sectors, greater innovation, competition and employment creation and supplement domestic capital, technology and skills for accelerated economic growth and development.” Chaudhary, as cited by PTI, additionally supplied an replace on the sale technique of IDBI Bank, confirming that the disinvestment will go forward consistent with the choice of the Cabinet Committee on Economic Affairs (CCEA). The CCEA, at its assembly on May 5 2021, granted ‘in principle’ approval for a strategic disinvestment accompanied by a switch of administration management. The approval coated the sale of the federal government and LIC’s stake, topic to session with LIC and throughout the framework determined by the RBI. According to the minister, 60.72% of IDBI Bank’s shareholding has been put up for strategic sale together with administration management. The authorities will divest 30.48% of its possession, which is able to depart it with 15% fairness afterwards. LIC will scale back its holding by 30.24%, retaining 19% fairness after the sale. As of March 2025, the financial institution’s excellent capital and liabilities had been roughly Rs 4.11 lakh crore, backed by tangible and intangible belongings of an equal quantity.The minister additionally knowledgeable about continued enhancements within the monetary efficiency of Regional Rural Banks (RRBs), which delivered their highest-ever consolidated internet revenue of Rs 7,571 crore in FY24, adopted by Rs 6,825 crore in FY25, marking their second-highest end result. He additionally defined the explanation behind the dip, linking it to the implementation of the pension scheme with retrospective impact from November 1, 1993, together with funds in the direction of laptop increment legal responsibility. Chaudhary additionally highlighted the efficiency of RRBs, which have been strengthening throughout varied key metrics. These measures contains Capital to Risk Weighted Assets Ratio (CRAR), deposits, advances, non-performing belongings (NPA) and credit score–deposit (CD) ratio.