Foreign acquisitions of privately-owned banks in India is limited to up to 74%, with investment beyond 49% requiring prior government approval. However, foreign banks are allowed to establish branches and 100% wholly-owned subsidiaries. Foreign participation in state-owned banks is limited to 20%.
"CHAPTER 3: GENERAL CONDITIONS ON FDI [...]
3.4   ENTRY ROUTES FOR INVESTMENT 3.4.1 Investments can be made by non-residents in the equity shares/fully, compulsorily and mandatorily convertible debentures/fully, compulsorily and mandatorily convertible preference shares of an Indian company, through the Automatic Route or the Government Route. Under the Automatic Route, the non-resident investor or the Indian company does not require any approval from Government of India for the investment. Under the Government Route, prior approval of the Government of India is required. Proposals for foreign investment under Government Route, are considered by respective Administrative Ministry/Department. 
[...]
3.5   CAPS ON INVESTMENTS
3.5.1 Investments can be made by person resident outside India in the capital of a resident entity only to the extent of the percentage of the total capital as specified in the FDI policy. The caps in various sector(s) are detailed in Chapter 5 of this Circular. 
3.6   ENTRY CONDITIONS ON INVESTMENT
3.6.1 Investments by non-residents can be permitted in the capital of a resident entity in certain sectors/activity with entry conditions. Such conditions may include norms for minimum capitalization, lock-in period, etc. The entry conditions in various sectors/activities are detailed in Chapter 5 of this Circular.
[...]
5.2 PERMITTED SECTORS
a) In the following sectors/activities, FDI up to the limit indicated against each sector/activity is allowed, subject to applicable laws/regulations; security and other conditionalities. In sectors/activities not listed below, FDI is permitted up to100% on the automatic route, subject to applicable laws/regulations; security and other conditionalities. [...]
c) Foreign investment in sectors under Government approval route resulting in transfer of ownership and/or control of Indian entities from resident Indian citizens to nonresident entities will be subject to Government approval. Foreign investment in sectors under automatic route but with conditionalities, resulting in transfer of ownership and/or control of Indian entities from resident Indian citizens to non-resident entities, will be subject to compliance of such conditionalities. 
[...]
5.2.18 BANKING- PRIVATE SECTOR 
5.2.18.1 Banking- Private Sector  | % of Equity/FDI Cap: 74% | Entry Route: Automatic up to 49% Government route beyond 49% and up to 74%.
5.2.18.2 OTHER CONDITIONS [...]
 (2)  The aggregate foreign investment in a private bank from all sources will be allowed up to a maximum of 74 per cent of the paid-up capital of the Bank. At all times, at least 26 per cent of the paid-up capital will have to be held by residents, except in regard to a wholly-owned subsidiary of a foreign bank.
 (4)  Other conditions in respect of permissible limits under portfolio investment schemes through stock exchanges for /FPIs and NRIs, setting-up of a subsidiary by foreign banks and limits in respect of voting rights are at Annexure-8. 
5.2.19 BANKING- PUBLIC SECTOR
5.2.19.1 Banking- Public Sector subject to Banking Companies (Acquisition & Transfer of Undertakings) Acts 1970/80.  This ceiling (20%) is also applicable to the State Bank of India and its associate Banks. | % of Equity/FDI Cap: 20% | Entry Route: Government 
[...]
Annexure-8  Permissible limits under portfolio investment schemes through stock exchanges for /FPIs and NRIs  
The permissible limits under portfolio investment schemes through stock exchanges for /FPIs and NRIs will be as follows: [...]
(ii) Setting up of a subsidiary by foreign banks
(a) Foreign banks will be permitted to either have branches or subsidiaries but not both.
(b) Foreign banks regulated by banking supervisory authority in the home country and meeting Reserve Bank’s licensing criteria will be allowed to hold 100 per cent paid up capital to enable them to set up a wholly-owned subsidiary in India.
(c) A foreign bank may operate in India through only one of the three channels viz., (i) branches (ii) a wholly-owned subsidiary and (iii) a subsidiary with aggregate foreign investment up to a maximum of 74 per cent in a private bank. 
(d) A foreign bank will be permitted to establish a wholly-owned subsidiary either through conversion of existing branches into a subsidiary or through a fresh banking license. A foreign bank will be permitted to establish a subsidiary through acquisition of shares of an existing private sector bank provided at least 26 per cent of the paid capital of the private sector bank is held by residents at all times consistent with para (i) (b) above. [...]" (Government of India/Ministry of Commerce and Industry (2020), Consolidated FDI Policy (Effective from October 15, 2020))
Government of India/Ministry of Commerce and Industry (2020), Consolidated FDI Policy (Effective from October 15, 2020)
[<a href="https://dpiit.gov.in/sites/default/files/FDI-PolicyCircular-2020-29October2020_0.pdf">Policy</a>]