The government on Tuesday said it will not review the foreign direct investment (FDI) norms for the banking sector — a policy that has rendered lenders like ICICI Bank and HDFC as foreign-owned entities.

“No revisiting the norms... We are very clear (on this),” Industry Minister Anand Sharma said on Tuesday, when asked whether the government would review FDI norms in the wake of clarifications sought by the banks.

Asked about the claims by ICICI Bank and others that they are very much Indian, Mr. Sharma said: “Yes, they have said they are Indians, but they are Indian-controlled banks and governed by the regulations of Reserve Bank of India.”

“That’s the correct position,” he told reporters here.

Last week, the government had made it clear that ICICI Bank and HDFC Bank could not be called Indian-owned banks, thus setting at rest the debate generated over the nationality of the top two private sector lenders.

“At best, the two can be called as Indian-controlled banks,” DIPP Secretary R.P. Singh had told reporters last month.

Going by the definition, they are certainly a bank which is not owned by Indians, because equity of at least 74 per cent or around 74 per cent is from outside, he pointed out, buttressing the government’s stand.

FDI norms announced last year say that if indirect FDI in an Indian company exceeds 50 per cent, its investment in subsidiaries will also be treated as foreign investment.

Moreover, in calculating indirect foreign investment in an Indian entity, the sum total of FDI, stake from Non-Resident Indians, American and global depository Receipts, foreign currency convertible bonds and convertible preference shares will be taken into account.

Both ICICI and HDFC Bank have insurance ventures, where FDI is capped at 26 per cent.

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