The government will shortly come up with a roadmap for banking sector reforms, including hike in foreign direct investment cap in private banks to 74 per cent and raising voting rights for foreign players beyond 10 per cent, Finance Minister P Chidambaram indicated on Thursday.
Although declining to say whether the government will announce the FDI hike during the winter session of Parliament, he confirmed that the roadmap would be unveiled by this year end.
Chidambaram had earlier said the United Progressive Alliance stands by the notification issued by previous National Democratic Alliance government on March 5, 2004, to hike FDI cap in private banks to 74 per cent.
But the finance ministry and the Reserve Bank of India are yet to chart out the roadmap for the FDI hike and raising the voting rights of foreign players, now capped at 10 per cent irrespective of their shareholding.
Chidambaram had on Wednesday stated in Parliament that hike of FDI limit in private sector banks would create an enabling environment for higher foreign investment inflows.
It would result in infusion of technology and management practices that will enhance competitiveness, he said.
In order to regulate the flow of FDI and set out the roadmap for this purpose, the RBI placed in the public domain draft guidelines in July this year and was in the process of considering suggestions and feedback received, he said.
All the changes in the banking policy are being contemplated to strengthen the sector in India for the benefit of customers and preserve their trust in the banking industry, he said.