Mumbai, June 3 -- India is considering relaxing its stringent banking ownership regulations to attract more foreign investment, driven by increasing international interest and the nation's expanding economic needs.

The Reserve Bank of India (RBI) recently permitted Japan's Sumitomo Mitsui Banking Corp to acquire a 20% stake in Yes Bank, marking the largest cross-border financial deal in Indian history.

Currently, foreign investors face a 15% cap on individual ownership and a 26% limit on voting rights in Indian banks.

These restrictions, along with other regulatory complexities, have discouraged foreign banks, whose share in India's bank credit remains under 4%.

However, RBI Governor Sanjay Malhotra indicated that a review of sharehol...