The government will soon set up a high-powered committee to examine the banking sector’s role in building Viksit Bharat and supporting India’s long-term economic growth.

Finance Minister Nirmala Sitharaman announced the plan at PSB Confluence 2026. She said the committee would build on ideas from two days of discussions involving banking sector stakeholders.

• The proposed committee will examine how banking reforms can support India’s development ambitions over the next two decades.
• Sitharaman said Indian banks are entering the reform process from a stronger position, with non-performing assets at their lowest levels.

Why Banking Sector Matters

Sitharaman said India has less than 20 years to work towards its development horizon. She stressed the need to use this period to accelerate economic reforms and growth. “We are in 26, so less than or short of 20 years is what we have before us,” Sitharaman said.

The proposed committee will consider ideas and research emerging from the two-day banking confluence. It will also review material shared with participants before the discussions. Sitharaman said the discussions were designed to bring practical views from people directly involved in implementing banking policies.

The government expects these inputs to help the committee develop recommendations on the future direction of India’s banking sector. The panel will examine where banks need to evolve and how they can contribute more effectively to the country’s economic ambitions.

Banks Enter Reform Phase From Stronger Position

The announcement comes as Indian banks show significant improvement in asset quality. Sitharaman said banks’ non-performing assets have fallen to their lowest levels. She described this as a strong foundation for undertaking the next round of banking reforms.

“Your NPAs are the lowest ever Indian bankings have seen, and therefore they cannot be a better position of strength with which you can take on reforms,” she said.

Lower-stressed assets can give banks greater capacity to expand lending and support productive economic activity. A stronger banking system will be important as India seeks higher investment across infrastructure, manufacturing, businesses and other growth sectors.

Banks also have a central role in directing savings towards productive investment. Their ability to provide credit at scale can influence the pace of business expansion and capital formation.

The proposed committee, therefore, signals a shift towards examining the banking sector’s future role rather than focusing only on existing challenges. Sitharaman said the government would be ready to move ahead with reforms after the committee studies the available material and submits its recommendations.

The committee’s recommendations could shape the next phase of banking reforms in India and determine how effectively the financial sector supports the country’s long-term Viksit Bharat goal.