Budget 2026: High-level committee proposed on banking; 2 NBFCs restructuring planned

Finance Minister Nirmala Sitharaman on Sunday proposed setting up a high-level panel to review India’s banking sector and align it with the country’s next phase of growth.

Presenting the Union Budget 2026-27, Sitharaman said the sector today is characterised by “historic highs in profitability, improved asset quality and coverage exceeding 98% of villages”.

“At this juncture, we are well-placed to futuristically evaluate the measures needed to continue on the path of reform-led growth,” she said.

She announced the setting up of a “High Level Committee on Banking for Viksit Bharat” to comprehensively review the sector and align it with India’s growth priorities, while safeguarding financial stability, inclusion and consumer protection.

Outlining the government’s approach for non-banking finance companies (NBFCs), the minister said a vision for NBFCs for Viksit Bharat has been set with clear targets for credit disbursement and technology adoption.

As a first step to achieve scale and efficiency in public sector NBFCs, the Budget proposes restructuring Power Finance Corporation and Rural Electrification Corporation.

What was announced in Budget 2025?

In the Union Budget 2025, FM Sitharaman announced several initiatives to improve the country’s banking and financial services sectors. One of the significant announcements was the revamping of the PM SVANidhi scheme, which included higher bank loans, UPI-linked credit cards with a ₹30,000 ceiling and further capacity-building assistance for recipients.

The Budget for FY2025-26 also suggested extending India Post Payments Bank’s scope, with emphasis on rural services. A redesigned Central KYC Registry was another step taken to ensure compliance and expedite bank and financial institutions’ customer onboarding.

To support small businesses and micro-enterprises, customised credit cards with a ₹5 lakh limit were introduced for Udyam-registered firms. The government also proposed a Grameen Credit Score framework for public sector banks to better meet the credit needs of SHG members and rural borrowers.