Centre forms high-level committee to review India's banking sector
What's the story
The Indian government has formed a five-member high-level committee to review the country's banking sector. The move comes as part of India's journey toward becoming a developed economy. The committee will be headed by Suresh N. Patel, former Central Vigilance Commissioner, and will have a tenure of six months, the Finance Ministry announced on Friday.
Panel composition
Committee includes personalities from the banking and finance sector
Along with Patel, the committee also includes Shirish Chandra Murmu (RBI Deputy Governor), Padmaja Chunduru (former MD & CEO of Indian Bank), and N S Vishwanathan (former RBI Deputy Governor).
The Joint Secretary (Banking) in the Department of Financial Services will be the Member Secretary for this panel.
The formation of this committee was announced by Finance Minister Nirmala Sitharaman during her Budget speech for 2026-27.
Review goals
Committee to recommend structural, institutional reforms in banking sector
The committee has been tasked with reviewing the banking sector and recommending structural, institutional, regulatory, and legislative reforms.
The aim is to make it globally competitive, financially inclusive, and resilient by 2047.
It will examine existing banking practices and prudential norms while identifying global best practices to recommend a roadmap for developing globally competitive Indian banks.
Regulatory assessment
It will also review legal frameworks governing banks
The committee will also review the regulatory and legal frameworks governing banks, including regional rural banks and cooperative banks.
It will suggest reforms to improve operational efficiency and ease of banking.
Further, it will assess the long-term capital requirements of banks, development financial institutions, and non-banking financial companies (NBFCs), recommending funding sources to support credit growth.
Investment strategies
Preparing roadmap for digital innovation in banks
The committee will also look into the differences in the cost of capital for businesses.
It will recommend policy measures to boost private investment and support sustainable growth.
The terms of reference also include preparing a roadmap for artificial intelligence and digital innovation in banks, with safeguards against cyber risks.
Workforce preparation
Committee will also look into priority sector lending framework
The committee will recommend strategies for talent acquisition and capacity building to prepare the banking workforce for future requirements.
It will also review the priority sector lending framework and Lead Bank Scheme to assess their relevance, effectiveness, and coordination in ensuring inclusive, balanced, and data-driven credit delivery in line with evolving economic priorities and financial inclusion goals.