Ashish Bhalla’s Take on Increase in FDI Limit
Ashish Bhalla analyses how the FDI or Foreign Direct Investment is going to benefit the private sector banks in the coming months. The government is deciding to increase the rate of FDI which is surely going to prove advantageous to private banking sector. At present, the rate is 74% and the current government is in constant talks to take the percentage higher to 100%, and also to increase the limit of 20% of state run banks to around 49%. Ashish Bhalla says that the foreign investment incorporates overseas portfolio investment along with foreign direct investment via different ways. Ashish Bhalla explains clearly how the rise in FDI limit can benefit different sectors. For instance, the banking sector weightage as per the MSCI index would gradually increase with respect to increasing foreign investment headroom. In addition to this, he says that one of the largest beneficiaries would be HDFC bank as the foreign holding is near the limit of 74%. Some other banks from public sector...