High level banking committee to drive reforms and strengthen India’s financial sector

Experts anticipate the committee will investigate novel approaches to gather deposits and methods to boost the sector’s contribution to economic development while ensuring financial stability, inclusivity, and consumer safeguards.
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The recently announced Union Budget for FY2027 includes plans to form a “High Level Committee on Banking for Viksit Bharat.” This initiative aims to conduct an extensive assessment of the banking industry and position it to support India’s future growth trajectory, while maintaining financial security, accessibility, and customer protection.

Finance Minister Nirmala Sitharaman highlighted the robust financial health of Indian banks, noting record profitability levels, reduced non-performing assets, and banking services extending to nearly all rural communities nationwide.

“Given current strengths, this is an opportune moment to strategically examine necessary reforms to sustain sectoral progress,” she stated.

Industry perspectives

Karthik Srinivasan, Senior Vice President & Group Head at ICRA, observed that significant banking sector evolution over the past decade justifies revisiting financial system frameworks.

“Financial institutions must expand their economic participation as India advances. Ensuring optimal operational strength could involve evaluating consolidation prospects, regulatory adjustments, or ownership modifications,” he commented.

Addressing deposit shortages

Srinivasan noted that with banks encountering fund collection difficulties, the committee may recommend exploring alternative liability management approaches.

Published on February 1, 2026