Private sector lenders, including ICICI Bank, HDFC Bank and Axis Bank, may soon have the option of turning into fully-owned foreign banks, with the government reconsidering a proposal to allow up to 100% foreign direct investment (FDI) in private sector banks. The move is likely to be a breather for the struggling banking sector, which has been reeling under the rising weight of bad loans, sources said. The government currently permits 74% FDI in private banks, with up to 49% allowed under the automatic route. Foreign holdings beyond 49% need to be cleared by the Foreign Investment Promotion Board (FIPB). Among the leading private lenders, the foreign holding in Kotak Mahindra Bank is now at 69.8%, in ICICI Bank at 65.27%, in Axis Bank at 50.6% and in HDFC Bank at 48%. The move to raise the FDI ceiling will help them, as well as the upcoming payments and small finance banks, tap overseas markets to raise their capital base. The Department of Industrial Policy