Sending a strong signal about the resilience of India’s financial sector, Finance Minister Nirmala Sitharaman on Sunday announced that the government will set up a high-level committee on banking for Viksit Bharat to keep reforms on track.
Speaking during her ninth consecutive Budget speech in Parliament, Sitharaman said the committee will undertake a comprehensive review of the banking system and recommend changes to support the country’s next stage of economic growth, while also focusing on financial stability, inclusion and consumer protection.
She noted that Indian banks are now in a strong position, backed by healthy balance sheets, robust profitability and improved control over non-performing assets. With asset quality improving and coverage crossing 98 per cent, the banking sector is seen as stable and ready to support future growth.
NBFC Restructuring And Investor-Friendly Reforms
The Finance Minister said the government plans to restructure public sector non-banking financial companies (NBFCs) into larger and stronger entities, modelled on institutions such as the Power Finance Corporation and the Rural Electrification Corporation, with the objective of improving operational efficiency.
Addressing foreign investment norms, Sitharaman said, “For foreign investors, the rules on non-debt investments under foreign exchange laws will be reviewed. The aim is to make them more modern and user-friendly, in line with India’s changing economic priorities.”
These steps, she said, are intended to align the financial sector with India’s evolving economic needs while improving ease of doing business for global investors.
Push To Deepen Bond And Municipal Markets
The Budget also outlined measures to strengthen the corporate bond market, including the introduction of a market-making framework with access to funds and derivatives linked to corporate bond indices. In addition, total return swaps on corporate bonds will be introduced to improve market depth and liquidity.
To promote the municipal bond market, the Finance Minister announced incentives for larger cities issuing high-value bonds. Cities issuing a single bond exceeding Rs 1,000 crore will be incentivised with Rs 100 crore, building on the existing ‘Amrit’ scheme.
Sitharaman also noted that in the run-up to the Budget, the government sought inputs from citizens across the country, including youth, through multiple platforms as part of its consultative approach to policymaking.
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