GOVT TO WAIT FOR RBI STAND BEFORE DECIDING ON FDI CAP

The government will wait for the Reserve Bank of India (RBI to take the first step before deciding on whether to reduce the foreign investment cap on private sector banks to below 50 per cent from the current 74 per cent. Currently, the government is not in amood to cut the cap, a proposal mooted in a discussion paper on entry of new banks, released by the RBI last year.  The finance ministry said it would wait for RBI guidelines, a development which will provide much relief to ICICI Bank and HDFC Bank. Both are already known as Foreign Owned Indians Controlled entities, after foreign investment in them rose much above 50 per cent, following new norms of calculations by the commerce ministry.  “We are not thinking in terms of cutting the cap on foreign investment in private sector banks. The proposal is not under consideration. We will wait for RBI norms on new banks before taking any decision in this regard,” a key official with the financial services department of finance ministry told.