Finance Minister Nirmala Sitharaman announces plans to set up a high-level committee to overhaul India’s banking system, aiming to support the country’s growth ambitions and enhance financial efficiency.
Finance Minister Nirmala Sitharaman said on Monday that the government will soon set up a high-level committee to examine India’s banking system and map out reforms for what she called “Banking for Viksit Bharat”. Speaking at the two-day public sector bank confluence, she said the panel would be announced shortly and would advise the government on the sector’s next phase of development.
The proposal was first flagged in the Union Budget this year, when Sitharaman said the committee would take a broad look at banking, with the aim of aligning it with India’s growth ambitions while protecting financial stability, inclusion and consumer protection. Reuters-style reporting on the Budget proposal noted that the panel is also expected to examine ways to improve efficiency across the financial system, including in non-banking financial companies, which play a growing role in lending.
Business Standard reported that Sitharaman has pushed back against narrowing the discussion to mergers of public sector banks alone, saying the real issue is whether the sector is strong enough to meet the financing needs of a developed economy. According to the same report, the panel is expected to sketch out the steps needed to build larger, more capable lenders.
Financial Services Secretary M Nagaraju later said the committee would look at balance sheet constraints at public sector banks so they can use capital more effectively. Other reports said the panel’s remit is likely to include technology adoption, scale and efficiency in NBFCs, as well as broader structural changes aimed at supporting credit growth without weakening stability.
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