The Cabinet Committee on Economic Affairs on Thursday decided to increase the foreign direct investment limit in private banks from 47 per cent to 74 per cent.
The announcement saw stocks of private banks HDFC Bank, Karnataka Bank and Federal Bank surging, even as the Sensex continued to plummet.
Finance Minister Jaswant Singh had in his Budget for 2003-04 announced that the FDI limit in private banks would be hiked.
The Cabinet, however, deferred the proposal for hiking foreign investment cap in telecom sector to 74 per cent from the existing 49 per cent.