Mumbai, July 16 -- Reserve Bank of India Governor Sanjay Malhotra on Tuesday said the central bank is open to permitting foreign banks to hold up to 26% stake in Indian lenders, provided such investments comply with existing policy norms.

While no formal proposals have been received so far, Malhotra clarified that there is no restriction under the current Foreign Direct Investment (FDI) policy.

He added that voting rights remain capped at 26% in accordance with the Banking Regulation Act.

So far, higher foreign ownership has only been permitted in special cases like DBS's takeover of Lakshmi Vilas Bank during a crisis.

"We've not received any case where a foreign bank wants to own 26% of Indian banks. But if they come, we are already ...