India’s Plan For “World-Class Banks”: FM Sitharaman Sets Growth Agenda

India’s Finance Minister Nirmala Sitharaman announced that the government is working with the Reserve Bank of India and banking institutions to build “world-class” banks and foster a dynamic ecosystem where more large-scale banks can grow. She said considerable groundwork has already begun and emphasised that mergers alone are not the only route; structural reforms and regulatory environment play key roles.

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India’s Plan For “World-Class Banks”: FM Sitharaman Sets Growth Agenda
Finance • 49 days ago • 3679 views

India’s Plan For “World-Class Banks”: FM Sitharaman Sets Growth Agenda

IN SHORTIndia’s Finance Minister Nirmala Sitharaman announced that the government is working with the Reserve Bank of India and banking institutions to build “world-class” banks and foster a dynamic ecosystem where more large-scale banks can grow. She said considerable groundwork has already begun and emphasised that mergers alone are not the only route; structural reforms and regulatory environment play key roles.

TL;DR

  • FM Sitharaman said India needs many large, world-class banks and is in talks with RBI and private/public sector banks to determine the roadmap.
  • She clarified that creation of such banks may involve consolidation, new entities or expansion of existing institutions, but the focus is on building an ecosystem rather than just amalgamation.
  • Speaking at a Banking & Economics Conclave, she remarked that India’s environment is ready but needs more dynamism and flexibility for banks to operate and expand.
  • Earlier consolidation had reduced 27 PSBs to 12, and further structural work is under discussion.
  • The agenda aligns with India’s ambition to support its rapid economic growth, deepening credit and global competitiveness.
  • Analysts note that while full-scale reform may take time, the public declaration signals shift in banking strategy.

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