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Informist, Thursday, Jul. 9, 2026

 

By Sagar Sen and Priyasmita Dutta

 

NEW DELHI – A delay at the top echelon of government is delaying the formation of the high-level committee on banking, a senior finance ministry official said. "Broadly the contours of the panel have been formed, but the final terms of reference will be approved at the highest level of the government, which is taking a bit more time," the official told Informist.

 

Another finance ministry official said that while setting up the high-level committee is a priority for the government, other issues like tackling geopolitical turmoil and ensuring domestic stability are occupying its attention. "Once things settle down and the government's focus shifts back to reform measures, it will be finalised," the official said.

 

The Budget for the financial year 2026-27 (Apr-Mar) proposed setting up a high-level committee on banking to comprehensively review the sector and align it with the country's growth goals while safeguarding financial stability, inclusion, and consumer protection. The panel is also likely to look into the possibility of merging certain public-sector banks to form even larger banks, the official said. It will evaluate the overall operations and focus area of each bank and, after analysing the prospects, give its suggestions on the roadmap to create larger state-owned banks.

 

It may also look into tweaking reserve ratio requirements, the criteria for issuance of banking licences, and the framework for transition of small finance banks into larger entities. The committee is likely to give its observations on the progress of financial inclusion as well as the digital public infrastructure framework, the official said.

 

Informist had reported in April that M. Nagaraju, former secretary in the Department of Financial Services, may be appointed head of this high-level committee. Nagaraju retired as secretary on May 31.

 

According to the second official, the government was keen to set up the panel before the public-sector banks' conclave later this month. "It all depends on when the top authorities give the green signal," the official said. 

 

The finance ministry plans to hold a conclave for public-sector banks in July to brainstorm reforms for the sector and take stock of past decisions. During the conclave, government officials, bankers, and industry experts are also likely to discuss ways to have at least two globally competent banks by 2047, an item that the high-level committee will look into.  End

 

Edited by Rajeev Pai

 

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