BANKING FOR VIKASIT BHARAT
HIGH LEVEL COMMITTEE FORMED
Dated 31.10.2026 : The ‘High Level Committee on Banking for Viksit Bharat’ was announced in the Budget 2026-27 by Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman . Now The Government of India has constituted the High Level Committee on Banking for Viksit Bharat to undertake a review of India’s banking sector and to recommend structural, institutional, regulatory and legislative reforms necessary to make it globally competitive, financially inclusive, and resilient for Viksit Bharat, 2047.
Shri Suresh N. Patel, former Central Vigilance Commissioner will be the Chairman of the Committee. Besides, three distinguished experts- Shri Shirish Chandra Murmu (Deputy Governor, Reserve Bank of India), Smt. Padmaja Chunduru (Former MD & CEO, Indian Bank) and Shri N S Vishwanathan (Former Deputy Governor, Reserve Bank of India) will be the members of the Committee. The Joint Secretary (Banking), Department of Financial Services will be the Member Secretary of the Committee. The tenure of the Committee shall be six months.
The Terms of Reference of the Committee are as follows:
- Assess the present banking practices and prudential norms, identifying global best practices, and adapt them suitably for the Indian banking system, while also providing a roadmap for creating globally competitive banks.
- Review the existing regulatory and legal frameworks for banks, including Regional Rural Banks and Cooperative Banks, and suggest reforms to bring in efficiency and enable ease of doing banking for Viksit Bharat.
- Undertake assessment of the long-term capital requirements for banks, including Development Financial Institutions and Non-Banking Financial Companies, with recommendations on funding sources and enabling mechanisms to support credit growth.
- Examine differences in cost of capital for business, and suggest policy options to boost private investment for sustainable growth.
- Prepare a roadmap for AI and digital innovation in banking institutions, while providing for safeguards against cyber risks. Further, to suggest a strategy for talent acquisition and capacity building to ensure a future-ready workforce for the banking sector.
- Review the Priority Sector Lending framework and Lead Bank Scheme to assess their relevance, effectiveness, and coordination in promoting inclusive, balanced, and data-driven credit delivery aligned with evolving economic priorities and financial inclusion goals.
- Make recommendations on any other matter referred to the Committee by the Government of India.
Dated 09.02.2026 : The Union Budget 2026 has set the stage for a significant evolution in India’s financial architecture. Finance Minister Nirmala Sitharaman’s announcement of a High-Level Committee on Banking for Viksit Bharat signals that the government is no longer just looking at “managing” banks—it is looking at “reimagining” them for a $30 trillion economy.
Why a High-Level Committee Now?
India’s banking sector has undergone a massive cleanup over the last decade, transitioning from high NPAs to “twin balance sheet advantage.” However, to reach the goal of a developed nation by 2047, the current banking scale may not be enough.
The committee is expected to solve three critical puzzles:
- The Scale Gap: India needs banks that can compete on a global scale to fund massive infrastructure projects without creating systemic risks.
- Credit Penetration: With a focus on MSMEs and the “last mile,” the committee will likely explore how to deepen credit-to-GDP ratios.
- The NBFC Synergy: The proposed restructuring of PFC and REC suggests a move toward specialized, high-capacity lending institutions.
Key Pillars of the Upcoming Reforms
While the official Terms of Reference are being finalized, the roadmap is clear:
- Structural Agility: Moving beyond simple mergers toward “functional specialization.”
- Digital-First Governance: Integrating AI and real-time data into regulatory frameworks to prevent future stress.
Global Benchmarking: Ensuring Indian banks feature more prominently in the Top 50 global banks by asset size
The Human-AI Perspective
As we move toward this “Banking 2.0,” the intersection of human judgment and AI-driven analytics will be the cornerstone of risk management. A “Human-AI Certified” approach to finance ensures that while algorithms handle the data, ethical oversight and strategic vision remain firmly in human hands.
The formation of this committee isn’t just a bureaucratic step; it’s a strategic pivot. The next few months will be crucial as the panel outlines how Indian capital will fuel Indian ambition.
Latest Status (Post-Budget Update)
The Finance Minister recently clarified (as of February 8, 2026) that the government intends to constitute the “High-Level Committee on Banking for Viksit Bharat” at the “earliest.” While the exact names of the members haven’t been released yet, we now know more about the committee’s specific direction:
- Beyond Mergers: The FM explicitly stated that the committee’s mandate should not be “narrowed down” to just bank mergers. Instead, it is about “priming” the banking sector to fund a developed India.
- The “Mega-Lender” Vision: A core goal is to create a roadmap for Indian banks to reach the scale necessary to fund massive national infrastructure projects.
- NBFC First Step: The government has already moved on the first related reform—proposing the restructuring of the Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) to improve efficiency in public sector NBFCs.
- Regulatory Focus: It is expected to review sensitive issues like the 26% voting rights cap for promoters and the ownership structure of private banks to attract more investment.
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