The government is keen on increasing the set limit of foreign direct investment in public-sector banks from 20 to 49 per cent; the change in monetary policy will help public banks attract more foreign investment and thus enhance their competitiveness in the financial market. Generally the aim of keeping a cap on holdings is to keep control of the banks. It is important to ask why should the GOI keep a cap on banks at all, why not let the banks and their management decide how much foreign direct investment (FDI) they need and for how long? Banks are like any other public limited company that should be ultimately answerable to its shareholders and customers; bank&’s management should do whatever it takes to serve their customers and make the company profitable and competitive. Last year private banks were freed for the first time to invite foreign investments thus diverse investment tools were permitted to accept FDI up to 74 per cent. GOI does not have the full resources to support banks, allowing foreign investment will provide financial backing that public sector banks urgently need. According to the GOI&’s ‘Indradhanush’, a revamping plan for the banks, the government has decided to invest Rs 70,000 crore over four years in public sector banks and has put an onus on the latter to raise Rs 1.1. lakh crore from financial markets to meet the capital requirement. Albeit, Rs 25,000 crore has already been invested in public sector banks in the current fiscal; GOI plans to invest Rs 10,000 crore in 2017-18 and the year following it. If GOI is keen on investing taxpayers’ money let it do for the banks, which primarily serve the most remote areas and financially vulnerable sections of the population. At present it&’s a mix; in rural areas there are hardly any banks, apart from branches of State Bank of India in district towns. Thus there is no guarantee that banks with GOI investment will serve the needs of rural India, unless made an explicit condition. FDI is as good as GOI&’s investment; it can be called just another source of financial back-up for the public sector banks. Control will remain with the management of the bank; investors will be concerned with performance of the banks, which is appropriate. If A invests money, A should have property rights to know how the invested capital is doing. GOI should invest taxpayers’ money in infrastructure development and reform-related programmes, thus the people with bank accounts can make use of the much-hyped financial set-up. Most of the Indian investors want to invest outside India, as there is no ‘market’ in India. To bring banking to the bank-less should be GOI&’s priority.