PSU Banking stocks slump up to 4% as Finance Ministry clarifies on FDI restriction

On Wednesday, December 3, shares of India's state-run lenders, including Indian Bank Ltd., Punjab National Bank Ltd., and others, dropped as much as 4% following the Finance Ministry's clarification on raising the sector's foreign direct investment (FDI) cap. In response to queries from MPs Ranjeet Ranjan and Haris Beeran, the Ministry sent a formal response to the Lok Sabha. Questions varied from whether the government has suggested raising the FDI limit in PSU Banks to 49%, the list of banks that will be impacted and the expected foreign inflows and the measures proposed to prevent concentration of foreign ownership inside the PSU Banks.