‘Viksit Bharat’ panel to steer reform-led growth as Centre sharpens focus on NBFCs and digital finance
Banking Sector Set for Comprehensive Review
The Centre has proposed a high-level committee on banking to evaluate India’s financial system and sustain reform-led growth, Finance Minister Nirmala Sitharaman announced in her Union Budget 2026 speech.
- The committee will assess policy gaps and future-ready reforms.
- The objective: align banking with India’s next growth phase while protecting stability and consumers.
With 98% of villages already banked, what comes after access?
‘Viksit Bharat’ Lens on Growth and Stability
Sitharaman said the proposed panel will review the sector through the lens of ‘Viksit Bharat’, balancing expansion with safeguards.
- Focus areas include financial stability, inclusion, and consumer protection.
- The review aims to future-proof banking as credit demand and digitisation accelerate.
It’s less about adding branches now, more about strengthening the foundation.
NBFCs Get Clearer Direction
The Budget also outlined a sharper vision for non-banking financial companies (NBFCs).
- Clear targets will be set for credit disbursement and technology adoption.
- Public sector NBFCs are expected to scale up efficiency and reach.
Can NBFCs become the system’s growth engine without adding systemic risk?
PFC and REC Restructuring on the Table
As a first step, the government plans to restructure Power Finance Corporation and Rural Electrification Corporation.
- The move targets scale, operational efficiency, and sharper mandates.
- Both institutions play a critical role in infrastructure and power financing.
This is consolidation as capability-building, not cost-cutting.
Forex Rules to Be Simplified Further
Sitharaman also proposed a comprehensive review of the Foreign Exchange Management (Non-debt Instruments) Rules.
- The aim is a more contemporary and user-friendly foreign investment framework.
- Changes will align with India’s evolving economic priorities.
Earlier, amended FEMA regulations in 2024 clarified rules for foreign currency accounts for Department for Promotion of Industry and Internal Trade-recognised startups.
Digital Payments Support Continues
Beyond banking reforms, the Centre reaffirmed its calibrated approach to digital finance.
- INR 2,000 Cr has been allocated for incentives promoting RuPay debit cards and low-value BHIM-UPI transactions up to INR 2,000 in FY27.
- The outlay is sharply higher than INR 437 Cr budgeted for FY26, though below the INR 2,196 Cr revised estimate.
Is this the bridge funding needed to sustain zero-MDR payments?
TL;DR
Budget 2026 proposes a high-level banking committee to steer reform-led growth under the ‘Viksit Bharat’ vision. The Centre also targets NBFC scale, plans PFC-REC restructuring, simplifies forex rules, and boosts UPI incentives to INR 2,000 Cr.
AI summary
- High-level committee to review banking sector
- Focus on stability, inclusion, and consumer protection
- NBFCs get credit and tech adoption targets
- PFC and REC restructuring proposed
- INR 2,000 Cr allocated for UPI and RuPay incentives
