Govt, RBI debate new FDI norms

Govt, RBI debate new FDI norms

“One limited area is under discussion - that is banking sector. We are holding discussion with RBI,” Department of Industrial Policy & Promotion Secretary Ajay Shankar said at the Economic Editors Conference here.

According to the norms issued in February this year, both ownership and control of banks should be in the Indian hands for them to qualify as domestic entities.

These norms created a peculiar problem for banks like ICICI Bank, HDFC, ING Vysya and few more since their American and Global Depository Receipts would also be considered while calculating foreign ownership.

After GDRs and ADRs along with other overseas holdings are taken into account, they do not qualify as domestic entities. This could mean that they will have to adhere to the caps of 26 per cent in sectors like insurance in their joint ventures.

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