Centre likely to constitute high-level banking committee before Monsoon Session

The Centre is likely to constitute the high-level banking committee announced in the Union Budget 2026–27 before the Monsoon Session of Parliament begins, with the panel expected to chart a long-term roadmap for India's banking sector, government sources said.

Announcing the proposal during her Budget speech, Finance Minister Nirmala Sitharaman had said the committee would provide a dedicated mechanism to examine structural and policy issues across both public and private sector banks.

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Officials said the objective is to develop a long-term policy framework for the banking sector in line with the government's "Viksit Bharat" vision and to strengthen banks' ability to support India's growth ambitions.

According to official sources, the committee's terms of reference have already been finalised by the Department of Financial Services in consultation with the Prime Minister's Office.

The proposal is now awaiting formal approval from the Prime Minister's Office, which will constitute the committee and appoint its chairperson. Sources said former DFS Secretary M. Nagaraju, who retired on May 30, is among the frontrunners to head the panel, although no final decision has been taken.

The committee is expected to examine issues including banking sector consolidation, governance reforms, digital transformation, financial inclusion and measures to enhance the global competitiveness of Indian banks.

While its mandate will cover both public and private sector banks, officials indicated that discussions are likely to focus more extensively on public sector banks.

Sources also clarified that a proposal to raise the foreign investment cap in public sector banks to 49% is being examined separately and is not expected to significantly form part of the committee's terms of reference.