New Delhi, Oct. 28 -- Nifty PSU bank rose by 1.4% following reports that government intends to permit direct foreign investment in state-owned banks up to 49%, which is more than double the current limit of 20%.

The finance ministry has been in discussions with the Reserve Bank of India (RBI), regarding this issue for the past few months, although the proposal has not yet been finalised, said Reuters in its report.

A report from Reuters indicated that an increase from the existing limit of 20% is being considered, noting that this action also aims to reduce the disparity between the regulations governing government-owned and private banks. In India, foreign ownership is permitted up to 74% for private banks.

Interest from foreign inves...