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Finance Minister Nirmala Sitharaman said the government will soon constitute a high-level committee on Banking for Viksit Bharat to prepare a roadmap for the banking sector to support India’s development goals. The panel was proposed in the Union Budget to comprehensively review the sector while maintaining financial stability, inclusion and consumer protection. The announcement came during the two-day PSB Confluence, where public sector banks and financial institutions discussed deposit mobilisation, youth banking, investment financing, global capability centres, agriculture infrastructure, credit cards and priority sector lending.
Finance Minister Nirmala Sitharaman said the government is expected to announce a high-level committee on Banking for Viksit Bharat soon. The panel will review the banking sector and help prepare a roadmap for lenders to meet the financing requirements of a developed India.
Speaking at the two-day PSB Confluence, Sitharaman said the discussions at the event would provide useful inputs for the committee as it considers the future direction of India's banking sector and the role banks will play in achieving the Viksit Bharat goal by 2047.
The finance minister had proposed the committee in the Union Budget to comprehensively review the banking sector and align it with India's next phase of growth while safeguarding financial stability, inclusion and consumer protection.
Sitharaman said the current condition of the banking sector provides a strong base for reforms, pointing to non-performing assets (NPAs) being at their lowest level recorded by Indian banks.
Financial Services Secretary Sanjay Lohia said public sector banks need to maintain their current momentum as competition in the financial sector becomes stronger. He said technology is changing business models, customer expectations are evolving and new areas of economic activity are emerging rapidly.
According to Lohia, state-owned banks will need to improve their competitiveness, strengthen sectoral expertise and continuously adapt their capabilities, products and business models. He also highlighted the role of financial institutions in providing specialised expertise and financing structures that can complement the scale and reach of banks.
The two-day discussions are focused on seven areas, including deposit mobilisation, banking services for youth, support for the investment cycle, financing for global capability centres, agriculture and horticulture value-chain infrastructure, the credit card business and priority sector lending.
The PSB Confluence includes around 125 participants, comprising chairmen, managing directors and executive directors of public sector banks and financial institutions such as NABARD, EXIM Bank, SIDBI, NHB, IIFCL, IFCI and NaBFID. Senior officials from the Indian Banks' Association and the Department of Financial Services are also participating.
Lohia said deposit mobilisation remains important for sustainable economic growth, particularly as household savings preferences change. He said banks need to strengthen their deposit base through better customer privacy, convenience, consistent service, product innovation and stronger customer relationships.
He also stressed the need to expand banking access among India's growing digital population, as changes in digital adoption will influence savings, borrowing, investments and financial services. Banks, he said, have a role in providing young people with access to bank accounts, education loans and financing for new businesses.
Global capability centres were another focus of the discussions, with Lohia highlighting their growing role in infrastructure, business activity and employment. Banks will need to examine ways to support the expansion of GCCs in India through suitable financial services and funding.
The credit card business was also identified as an area requiring greater attention as customer behaviour, technology and competition continue to change. Lohia said public sector banks need to develop stronger credit card offerings while maintaining responsible underwriting, customer protection and appropriate risk controls. He also linked a strong credit card offering with the ability of banks to expand their customer base and CASA deposits.
The proposed committee comes at a time when the government is looking to position the banking sector for the country's longer-term economic requirements. Its recommendations could help determine how public sector banks adapt their products, financing capabilities and business models as India's economy expands towards the Viksit Bharat 2047 objective.
Source PTI
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