New Delhi: Indian banking sector may be going through yet another round of reforms, as the Finance Minister Nirmala Sitharaman revealed the government will soon announce a high-powered committee on banking. The committee is likely to review the role of banks in the future and make the recommendations so that banks can contribute to India’s development towards a developed country by 2047.
Sitharaman announced this at the two-day PSB Confluence 2026 in New Delhi on August 17. The committee was introduced in the Union Budget 2026-27 as a part of the overall vision of “Banking for Viksit Bharat”. It is expected to consider the banking sector and to propose reforms, while ensuring financial stability, inclusion and protection of customers.
What could change for banks?
The committee might result in modifications to the way banks operate and to the growth of the economy. This is likely to be one of the key topics to watch, as it will be explored how banks can expand their credit facilities for businesses, infrastructure, agriculture and other key sectors.
Issues including deposit mobilisation, banking facility for young customers, investment finance etc., supporting global capability centres, agriculture and horticulture infrastructure, credit cards, and priority sector lending are already on the agenda of PSB Confluence discussions. These discussions to be inputs for new committee.
The time public sector banks spend on technology, customer service, faster loan disbursement and efficient utilization of data could increase. Banks could also be incentivized to create new offerings geared toward young customers and new firms.
What does it mean for customers?
It might not be felt by regular bank consumers. The committee first needs to study the sector and submit its recommendations. Following this, the government and regulators would be able to determine which proposals would be put into place.
In small increments, customers may enjoy improved access to financial products, enhanced protection of their financial assets, improved digital banking services and more convenient access to credit. However modifications to the lending rules, fees or banking procedures will rely on the actual recommendations and ultimate government and/or regulatory decisions.
Banks are entering reforms from a stronger position
The Indian banks are in a better position to head further reforms as their non-performing assets (NPAs), or bad loans, are at the lowest ever levels, Sitharaman said. This will provide a firmer foundation for banks to facilitate the next stage of the economic development.
This could be a crucial move in determining the path the Indian banks should take for the sustained growth plans of the country, the committee said. The government is set to announce the committee on any soon and it has been reported that the committee might be formed later this month.
Put in the simplest terms, the gamble is to strengthen Indian banks for their preparedness to play a greater role in funding India’s growth towards Viksit Bharat 2047, making them stronger and more efficient.
