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Mumbai.High-level panel on banking reforms to be announced soon, FM says PSBs need to support Viksit Bharat goal

The government will soon announce a high-level committee to review and suggest reforms for the banking sector, Finance Minister Nirmala Sitharaman said on Monday. Speaking on the opening day of the two-day PSB Conclave 2026 in New Delhi, Sitharaman said the panel would examine the role of banks in supporting India’s long-term economic growth. A Finance Ministry source said the committee could be constituted later this month.

Budget 2026-27 had first proposed banking panel

The proposal for setting up the high-level committee was first announced in the Union Budget 2026-27. Sitharaman had proposed a panel on banking for Viksit Bharat, with the broader objective of aligning the sector with the country’s economic priorities and reviewing its preparedness for future challenges.

The committee has not yet been formally constituted. Once formed, it is expected to assess the banking sector’s role in meeting India’s development ambitions and identify areas where further reforms may be required.

Panel will review banks’ role in Viksit Bharat

Sitharaman said the committee would focus on the contribution of banks towards the government’s vision of making India a developed nation by 2047. She stressed that the target was no longer a distant one and that the banking system would have to play a crucial role in supporting economic expansion and development.

The government’s Viksit Bharat 2047 vision aims to transform India into a developed country by the time it completes 100 years of independence. Achieving that goal would require sustained investment and improvements across infrastructure, economic growth and financial systems.

Government promises quick action on panel recommendations

The Finance Minister also highlighted the improvement in the banking sector’s asset quality and the reforms undertaken in recent years. She indicated that the next phase would require further changes to ensure banks remain aligned with the country’s changing economic needs.

She assured that the government would move quickly once the committee submits its report. The key points are:

• The panel’s recommendations will be examined for implementation without delay.
• Banks’ role in achieving the 2047 development target will be reviewed.
• Further reforms will focus on strengthening the sector’s contribution to economic growth.

Public sector banks post record ₹1.98 lakh crore profit

Public sector banks have recorded a significant improvement in their financial performance. State-owned banks collectively posted a record net profit of more than ₹1.98 lakh crore in financial year 2025-26.

The strong profitability and improved asset quality provide the backdrop for the government’s renewed push for banking reforms. Lower bad loans have also strengthened the financial position of public sector lenders.

Lower NPAs signal stronger banking health

Non-performing assets, or NPAs, are loans or advances on which the borrower fails to pay interest or repay the principal for a specified period, generally 90 days. A decline in NPAs is considered an important indicator of improving asset quality and financial health.

The government now wants the banking sector to build on these gains while preparing for the larger economic demands of Viksit Bharat 2047. The proposed committee is expected to provide a roadmap for the next phase of reforms.