Govt sets up banking committee on reforms

Centre on Friday constituted a six-member High Level Committee on Banking for Viksit Bharat to review India's banking sector and recommend structural, regulatory and institutional reforms to prepare it for the country's development goals by 2047.The committee will be chaired by Suresh N. Patel, former Central Vigilance Commissioner, and will include Reserve Bank of India (RBI) Deputy Governor Shirish Chandra Murmu, former Indian Bank MD and CEO Padmaja Chunduru, and former RBI Deputy Governor N S Vishwanathan as members. The Joint Secretary (Banking) in the Department of Financial Services will serve as its Member Secretary.The committee will have six months to complete its work. Its formation follows the announcement made by Finance Minister Nirmala Sitharaman in the Union Budget 2026-27.The panel has been tasked with examining the existing banking framework and recommending changes to make Indian banks more globally competitive, financially inclusive and resilient as the country works towards the Viksit Bharat 2047 goal.Panel to examine banking regulations, capital requirementsThe committee will assess existing banking practices and prudential norms against global standards and identify practices that could be adapted to the Indian banking system. It will also prepare a roadmap for developing globally competitive banks.Its review will extend to the regulatory and legal frameworks governing banks, including Regional Rural Banks (RRBs) and cooperative banks. The panel will suggest changes aimed at improving operational efficiency and making banking easier for businesses and customers.Another key area of its mandate is the long-term capital requirement of the financial system. The committee will examine the funding needs of banks, Development Financial Institutions (DFIs) and Non-Banking Financial Companies (NBFCs), and recommend potential funding sources and mechanisms to support credit growth.It will also study differences in the cost of capital for businesses and suggest policy measures to encourage private investment and support sustainable economic expansion.AI adoption, priority sector lending also on agendaThe committee will draw up a roadmap for the adoption of artificial intelligence and digital innovation across banking institutions, while recommending safeguards against cyber risks.Its mandate also covers talent acquisition and capacity building, with a focus on ensuring that banks have the workforce and skills needed to adapt to technological changes.The panel will review the Priority Sector Lending (PSL) framework and the Lead Bank Scheme to assess whether they remain relevant and effective in delivering credit. It will examine how these mechanisms can improve coordination and support more inclusive, balanced and data-driven lending in line with changing economic priorities and financial inclusion objectives.The government has also left room for the committee to examine any other banking-related matter that may be referred to it.