Banking Reforms Panel to Drive Viksit Bharat 2047: FM Sitharaman
Finance Minister Nirmala Sitharaman has announced that the government will soon constitute a high-powered committee on banking reforms to assess how India’s banking sector can support the country’s transformation into a developed economy by 2047.
FM Sitharaman announced this on 17 August 2026 while inaugurating the two-day Public Sector Bank (PSB) Conclave 2026 in New Delhi. The conclave, organised by the Department of Financial Services (DFS), brought together the heads of public sector banks and financial institutions to discuss the sector’s future priorities.
The proposed committee will examine the role of banks in achieving the Viksit Bharat 2047 vision, with the government aiming to use the banking sector’s improved financial health as a foundation for further reforms. FM Sitharaman said the recommendations emerging from the conclave would provide substantive inputs to the committee, which will be expected to recommend practical measures for the sector.
The Finance Minister had first proposed the high-level banking committee while presenting the Union Budget 2026-27. The panel is expected to examine the banking sector’s preparedness to support economic growth while maintaining financial stability, inclusion and consumer protection. The government has not yet announced the committee’s chairperson, members or detailed terms of reference.
FM Sitharaman highlighted the significant improvement in the asset quality of public sector banks. According to DFS Secretary Sanjay Lohiya, gross NPAs of PSBs declined from 14.6% in March 2018 to 1.93% in March 2026, marking the lowest level recorded. Net NPAs also fell from 8% to 2.39% during the same period.
The stronger balance sheets will provide banks with an opportunity to support the next phase of India’s economic expansion while undertaking structural reforms. She called on banks to develop practical and implementable ideas that can address emerging financing requirements and help accelerate economic activity.
Youth financing emerged as another key priority. FM Sitharaman noted that people aged 15-29 account for 29% of India’s population and urged banks to improve access to education loans, entrepreneurship finance and investment products for young Indians.
The conclave focused on several areas, including deposit mobilisation, banking for youth, investment-cycle financing, global capability centres, agriculture and horticulture value chains, priority sector lending and innovation in the credit card business.
The government expects the proposed committee to build on these discussions and provide a roadmap for banking reforms that can strengthen the sector’s role in India’s journey towards Viksit Bharat 2047.