Banking reforms ahead as Budget 2026 proposes high-level committee

New Delhi (The Uttam Hindu): In the Union Budget 2026, the Finance Minister has made a major and far-reaching announcement to strengthen the country's banking and financial infrastructure. The government has clarified that to realize the dream of a 'developed India,' it is essential to prepare the banking sector for future needs. To this end, in his budget speech, the Finance Minister has proposed the formation of a 'High Level Committee' to comprehensively review the banking sector. This committee will not only assess the current situation but will also suggest a roadmap to prepare the sector for India's next growth leap.

New vision set for government NBFCs

With the formation of the committee, the government has also outlined a clear vision for public sector non-banking financial companies (NBFCs). This includes setting concrete targets for accelerating credit disbursement and adopting modern technology. The government believes that as the economy grows, the role of banks and NBFCs is also expanding, making reforms necessary. These reforms will ensure that financial institutions can fully support India's growth in the years to come.

Emphasis on increasing the efficiency of PFC and REC

The budget also included significant announcements regarding the Power Finance Corporation (PFC) and the Rural Electrification Corporation (REC), two major government institutions that play a key role in energy and infrastructure financing. The government has proposed restructuring these two institutions. This move aims to enhance their efficiency and make them more robust and effective in the face of changing economic conditions. This initiative demonstrates the government's commitment to transforming financial institutions into engines of growth, not just structures.