Banking FDI Falls to $115 Million in FY25

Foreign investment in India’s banking sector has slowed sharply over the past two years. FDI equity inflows fell from $898 million in FY23 to just $115 million in FY25. The government informed Parliament of this on Tuesday.

Minister of State for Finance Pankaj Chaudhary said in a written reply in the Rajya Sabha that total FDI includes equity inflows, reinvested earnings, and other capital. He added that FDI remains an important non-debt source of long-term capital. As a result, it supports technology transfer, innovation, and employment generation.

As per the Reserve Bank of India (RBI) rules, any acquisition that results in 5% or more ownership in a bank requires prior RBI approval. Furthermore, the central bank also continues to regulate priority sector lending norms for commercial banks.

Among public sector banks, State Bank of India (SBI) had the highest foreign holding at 11.07% as of March 2025. Canara Bank followed it at 10.55%. Bank of Baroda was at 9.43%. Union Bank of India was at 7.48%. Punjab National Bank was at 5.85%.

Separately, the government said over 56.31 crore Mudra loan accounts worth Rs 37.31 lakh crore have been sanctioned under the Pradhan Mantri Mudra Yojana. This was as of 2nd January, 2026.

On investor protection, SEBI has taken action against unregistered investment advisers on social media. Since 2024, the regulator has ordered disgorgement of Rs 665.26 crore in such cases.

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