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India is considering an increase in the foreign investment limit in public sector banks (PSBs) from the current 20%, as it looks to strengthen them into institutions that can raise capital easily, people privy to the development said.This is among several proposals policymakers are discussing as part of a broader slate of reforms planned to boost the economy amid geopolitical concerns.The government will not reduce its stake below 51%, while allowing higher foreign stakes, ensuring the public character of these banks, said a senior government official. A final call will be taken at the highest level of government, said the official.Financial services secretary M Nagaraju earlier this month said PSBs have moved beyond the phase of survival and stability, and are now positioned to play a larger role. 124077571Growth OpportunityThey must be champions of growth, innovation and leadership in the journey toward Viksit Bharat 2047. He highlighted the need for PSBs to aspire to global competitiveness, strengthen governance and operational resilience, and expand their role as sectoral champions across both traditional and emerging industries. He was speaking after the third PSB Manthan conclave.Currently, the foreign direct investment limit in public sector banks is capped at 20%, with voting rights set even lower — at a maximum of 10%. In the case of private sector banks, the limit is 74%. The government is examining how this shareholding and voting structure can be relaxed without compromising the essential character of these banks and the decision-making ability of their boards.There is a view within the government that the stellar performance of PSBs in the past few years and the growth opportunity given India’s potentially high growth and large investment in infrastructure, make investment in state-run banks very attractive. “Today, the biggest constraint is capital, and if we are looking to be among the top global banks, we need a balance sheet to support that ambition. Allowing foreign investment in PSBs can be a game changer if proper guardrails are in place,” said a senior executive at a state-run lender.He added that the government can also explore the golden share mechanism, under which control remains with the government, irrespective of the holding. The country’s largest bank by assets, State Bank of India, has about 10% foreign holding. PSBs have substantially improved their financial health.Combined gross non-performing assets dropped to 2.58% of gross advances at the end of March, from 9.11% in March 2021. Net profit increased to Rs 1.78 lakh crore from Rs 1.04 lakh crore, and dividend payouts grew to Rs 34,990 crore from Rs 20,964 crore. According to a CareEdge Ratings report, India’s bank credit-to-GDP ratio remains relatively low, underscoring the significant headroom for long-term credit deepening.

Mumbai: Nothing ventured, nothing gained: That's what money managers are telling HNI debt clients to convince them to climb steep risk and financial commitment ladders in search of higher yields.The risk matrix involves mandating contribution thresholds significantly above the ordinary, helping create an exclusive market for the debt to underpin double-digit returns from instruments that are far from liquid.Such deals recently include Shapoorji Pallonji's structured trade paper, with a minimum ticket size of ₹10 crore. The Pharmeasy transaction, too, is being hawked with a minimum deal size of ₹5 crore.These minimums are not mandated by regulations: HNIs can invest with far smaller sums, but are going for larger commitments instead as issuers target a narrow investor class. 124080732"Private debt transactions are usually done via a private placement mode, which restricts the number of investors and so, the average ticket size is higher," said Sahil Kapoor, head - Products, 360 ONE Wealth.API Holdings, the parent of PharmEasy, recently raised ₹1,689 crore through two tranches of unlisted NCDs to refinance debt. The structure offered coupons of 11.10% and 14.5% over three years, secured by pledges of listed ThyroCare shares and unlisted AIPL shares.HNIs with a minimum ticket size of ₹5.1 crore per PAN could buy these papers from wealth funds. These products have limited liquidity and are riskier than investment-grade debt.Know Your RisksHence, they can be offered only to investors who understand the risk associated with these instruments, said Kapoor. Earlier this year, a part of Shapoorji Pallonji Group's ₹28,500-crore debentures were marketed to wealthy clients in the secondary market with a ₹10 crore minimum investment.“Issuers are increasingly setting higher minimum ticket sizes for investors in their bond issuances, as they prefer sophisticated and institutional investors, who are not sentiment driven and who don’t start exiting their holdings, even at a discount, on the first sign of unfavorable news and who the issuer can reach out to for a rational hearing, in case of any dispensations they may need in facility terms,” said Nachiket Naik, head —private credit, Axis MF. In both cases, issuers are debt-laden or cash-burning companies, while investors are lured by the promise of double-digit returns. “HNIs are being taxed at the highest slab rate, achieving a posttax return of 7-8% requires targeting 12-13% yield, making traditional mutual fund avenues less attractive,” said Swati Singh, executive director & head — Fixed Income at AVENDUS Wealth. “This gap is driving demand for structured debt among HNIs and family offices, as valuation constraints and limited issuers make these deals one of the few viable channels for investment, yielding better post-tax returns.” With limited scope for secondary market transactions, investors are often forced to hold until maturity or restructuring. While the deals promise double-digit yields and exclusivity, inadequate transparency increase the risks of concentration, and illiquidity, leaving retail and HNI participants exposed compared with institutional players equipped to underwrite and monitor such exposures. “Bespoke debt instruments, such as Shapoorji Pallonji and PharmEasy issuances, are increasingly marketed to HNIs, but they carry risks for non-institutional investors since unlike listed bonds,” said an investor

Mumbai: The Indian rupee hit a fresh record low at 88.7975 per dollar on Tuesday, making it the worst performing currency among its Asian peers for the day.The rupee is under pressure because of a sharp rise in US visa fees, which is seen threatening the country's IT sector and remittances, compounding pressures from high tariffs and weak foreign investment into the domestic equity market.The double-whammy of visa fees and higher US tariffs has exerted pressure on the rupee, which has fallen 3.5% against the dollar since the start of 2025, the worst performing in Asia. 124080707Thai Baht, which is the second-best performing currency appreciating over 7%, rose to four-year year high two weeks ago because of a sharp jump in gold exports. The rupee opened lower on Tuesday despite a weaker dollar index in the early Asian trade. Within minutes it breached its previous record low of 88.4550 per dollar hit about a fortnight ago.Intraday, it fell more, and stop-losses were triggered once it crossed 88.50 level. It settled at 88.7550 per dollar on Tuesday compared with the previous close of 88.3075/1$.124080709"The hike in H-1B visa fees sparked worries over remittances and potential equity outflows from India's IT sector. Overall, in the last three months, domestic equity FPI outflows have been worth ₹60,000 crores backed by global trade uncertainties and India-US tariff uncertainty continue to prevail," said Kunal Sodhani, head-treasury at Shinhan Bank.According to experts, India is likely to be disproportionately impacted by the H-1B visa fee hike, as it accounts for a large share of applicants. The $100,000 fee may hit project delivery, thereby impacting revenues of IT companies. Meanwhile, lower deployment of workforce may lead to slowdown in remittances inflows.Currency dealers said the Reserve Bank of India likely stepped in to stem the volatility, but its presence was limited. Reuters reported on Tuesday that the central bank likely sold dollars via state-run banks near the 88.50 level to support the rupee before allowing it to slide further."RBI was conspicuous by its absence in the fall of rupee, probably trying to help exporters to some extent to mitigate the aftereffects of the tariffs on the Indian exports," said Finrex Treasury Advisors.With no concrete outcome on the India-US bilateral trade talks, treasury officials and currency dealers are seeing the possibility of the rupee hitting 89 per dollar level in the near term.

WASHINGTON - Federal Reserve Chair Jerome Powell on Tuesday signaled a cautious approach to future interest rate cuts, in sharp contrast with other Fed officials who have called for a more urgent approach. In remarks in Providence, Rhode Island, Powell noted that there are risks to both of the Fed's goals of seeking maximum employment and stable prices. But with the unemployment rate rising, he noted, the Fed agreed to cut its key rate last week. Yet he did not signal any further cuts on the horizon. If the Fed were to cut rates "too aggressively," Powell said, "we could leave the inflation job unfinished and need to reverse course later" and raise rates. But if the Fed keeps its rate too high for too long, "the labor market could soften unnecessarily," he added. Powell's remarks echoed the caution he expressed during a news conference last week, after the Fed announced its first rate cut this year. At that time he said, "it's challenging to know what to do." His approach is in sharp contrast to some members of the Fed's rate-setting committee who are pushing for faster cuts. On Monday, Stephen Miran, whom President Donald Trump appointed to the Fed's governing board, said that the Fed should quickly reduce its rate to as low as 2% to 2.5%, from its current level of about 4.1%. Miran is also a top adviser in the Trump administration and expects to return to the White House after his term expires in January, though Trump could appoint him to a longer term. And earlier Tuesday, Fed governor Michelle Bowman also said the central bank should cut more quickly. Bowman, who was appointed by Trump in his first term, said inflation appears to be cooling while the job market is stumbling, a combination that would support lower rates. When the Fed cuts its key rate, it often over time reduces other borrowing costs for things like mortgages, car loans, and business loans. "It is time for the (Fed) to act decisively and proactively to address decreasing labor market dynamism and emerging signs of fragility," Bowman said in a speech in Asheville, North Carolina. "We are at serious risk of already being behind the curve in addressing deteriorating labor market conditions. Should these conditions continue, I am concerned that we will need to adjust policy at a faster pace and to a larger degree going forward." Yet Powell's comments showed little sign of such urgency. Other Fed officials have also expressed caution about cutting rates too fast, reflecting deepening divisions on the rate-setting committee. On Tuesday, Austan Goolsbee, president of the Federal Reserve's Chicago branch, said in an interview on CNBC that the Fed should move slowly given that inflation is above its 2% target. "With inflation having been over the target for 4 1/2 years in a row, and rising, I think we need to be a little careful with getting overly up-front aggressive," he said. Last week the Fed cut its key rate for the first time this year to about 4.1%, down from about 4.3%, and policymakers signaled they would likely reduce rates twice more. Fed officials said in a statement that their concerns about slower hiring had risen, though they noted that inflation is still above their 2% target.