Sitharaman urges banking sector reforms for Viksit Bharat 2047 vision

FM Nirmala Sitharaman urged banking leaders for reform recommendations for Viksit Bharat 2047, announcing a high-powered committee will review suggestions from the PSB Conclave 2026 to shape India's future banking framework.

Finance Minister Nirmala Sitharaman on Monday urged banking leaders to submit recommendations on banking sector reforms as the government will soon set up a high-powered committee to assess the role of India's banking sector in achieving the vision of Viksit Bharat 2047.

Addressing the Public Sector Banks (PSB) Conclave 2026, Sitharaman said the government would soon announce a high-powered committee on public sector bank reforms, with the recommendations and outcomes of the two-day conference to be placed before the panel. The Finance Minister said the committee would examine the recommendations emerging from the conclave and submit its suggestions, with bankers expected to play a key role in shaping the banking framework needed to support India's growth ambitions for 2047.

Strong Foundation for Reforms

Sitharaman highlighted that non-performing assets (NPAs) of banks are at their lowest level ever, providing a stronger foundation for the banking sector to undertake further reforms and support economic growth.

Stressing the significance of the conclave, Sitharaman said, "We are in 2026, so less than or short of 20 years is what we have before us." "There couldn't have been a better time to talk about banking for Viksit Bharat, especially for the journey that all of you have gone through, come out of it without the recognition of difficulties and coming out towards the root of reform," she said.

Focus on Seven Key Themes

The Finance Minister said the Department of Financial Services (DFS) had worked on seven themes that would be important for taking the banking and financial sector forward. The themes of discussion are -- banking for youth, supporting the investment cycle, global capability centres, agriculture and horticulture value chain infrastructure, priority sector lending and reimagining credit card business.

Sitharaman said the DFS, for the first time during her tenure, had prepared detailed research documents on all seven themes selected for discussion at the meeting.

Spotlight on Youth Demographics

She singled out the document on youth as particularly striking, noting that it analyses India's young population across different age groups and life stages. The Finance Minister pointed out that nearly 29 per cent of India's population falls in the 15-29 age group, and said banks must factor this demographic profile into their planning and strategy.

"I must credit the Department of Financial Services for having worked on the seven different topics that shall be important to take the banking and financial sector forward," Sitharaman said. She stressed that the recommendations emerging from the two-day PSB conference would provide important inputs for the proposed high-powered committee on banking reforms.

With NPAs at historically low levels and the banking sector having undergone significant reforms in recent years, Sitharaman said the focus should now be on preparing banks to meet the evolving requirements of the Indian economy and contribute effectively to the country's long-term development goals. The proposed exercise is aimed at aligning the banking sector with the broader objectives of Viksit Bharat 2047, with bankers and other stakeholders expected to play a central role in shaping the next phase of reforms. (ANI)

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