Archive · 17 Aug 2026
Banking reform panel likely this month; may include consolidation roadmap
The government of India wants to make its banks bigger and stronger.
A special group of experts, called a committee, will be formed to study how to improve the banking system.
This committee might be announced this month.
The group will look at ways to join smaller banks together to make bigger ones.
It will also think about letting more foreign money come into public banks.
The government hopes to create four very large Indian banks.
The Prime Minister wants at least one Indian bank to be among the best five banks in the world.
The Finance Minister said Indian banks are in a strong position to make these changes because they are doing well now.
She also said many young people in India need banking services that fit their needs.
Finance Minister Nirmala Sitharaman said the government will soon constitute the High-Level Committee on Banking for Viksit Bharat to launch a new phase of banking sector reforms.
Sources indicated the panel may be formed this month, following its proposal in the Budget speech on February 1.
The committee is expected to consider bank consolidation, raising foreign direct investment limits in public sector banks, rationalising investor voting rights, and reviewing regulatory requirements such as the Cash Reserve Ratio and Statutory Liquidity Ratio.
The long-term objective is understood to include creating four large Indian banks, with Prime Minister Narendra Modi urging at least one Indian lender to aspire to be among the world's top five.
Sitharaman made the announcement at the two-day Public Sector Banks Conclave, where she noted that non-performing assets are at their lowest ever in Indian banking.
- Who
- Finance Minister Nirmala Sitharaman, Prime Minister Narendra Modi, Financial Services Secretary Sanjay Lohia, and public sector banks and financial institutions.
- What
- The government will constitute the High-Level Committee on Banking for Viksit Bharat to undertake a fundamental review of the banking sector and recommend reforms, potentially including consolidation.
- When
- Announced on Monday; the panel may be formed this month.
- Where
- India, at the two-day Public Sector Banks Conclave.
- Why
- To revive the bank consolidation agenda after nearly six years and align the banking system with India's long-term growth ambitions under Viksit Bharat 2047.
- Committee
- High-Level Committee on Banking for Viksit Bharat
- Announced by
- Finance Minister Nirmala Sitharaman
- Proposed in
- Budget speech on February 1
- Expected formation
- This month, according to sources
- Long-term objective
- Create four large Indian banks
- PM's aspiration
- At least one Indian lender among the world's top five
- NPA status
- Lowest ever in Indian banking
- Youth population
- 29% of India's population is aged 15-29