The government is considering increasing the foreign direct investment, FDI limit in private banks to 100 per cent, from the existing 74 per cent by relax foreign investment norms. According to the source, the Department of Industrial Policy and Promotion, DIPP, has sent a proposal to hike the FDI limit to the Department of Financial Services for its comments.urrently, 74 per cent FDI is permitted in the private sector banking, of which up to 49 per cent is allowed under the automatic route and beyond that through the approval of the Foreign Investment Promotion Board, FIPB. However, portfolio investments in the banking sector can go up to 49 per cent.The move will help the existing private sector banks, payments banks and small finance banks tap overseas markets to enhance their capital base. During April-June of this fiscal, foreign direct investment into the country grew 31 per cent to 9.50 billion dollars.