Finance Minister P Chidambaram said on Tuesday the inflow of foreign funds in the banking system was not disorderly and could be channelled for productive use.
Replying to supplementaries during Question Hour in Rajya Sabha he said: "There is no rush of capital in the banking system."
There was large inflow of capital mainly from export earnings, remittances, foreign direct investment, foreign institutional investments and private equity, he said.
"All this is of course good, if we can absorb and turn it into productive investments," he added.
Chidambaram said there was no proposal to reduce government's holdings in PSU banks below 51 per cent or raise it to 74 per cent.
"Our policy is that we would ensure adequate capital in banks strictly in accordance with BASEL II norms."