Top-level panel to tackle banks’ balance sheet constraints

The Centre will set up a high-level committee on banking to examine balance sheet constraints of public sector banks and enhance their ability to support economic growth, Financial Services Secretary M Nagaraju said on Friday.

Speaking at the ICPP Growth Conference, Nagaraju said the proposed panel—announced in the Union Budget—will review the banking sector with a focus on improving efficiency, inclusion and alignment with India’s long-term growth ambitions, while maintaining financial stability. The committee is expected to assess challenges faced by banks in leveraging capital and recommend measures to strengthen their balance sheets. The government is likely to soon finalise the panel’s terms of reference. The proposal was originally outlined by Nirmala Sitharaman in the FY27 Budget, where she called for a comprehensive review of the banking sector to align it with the country’s next phase of development under the “Viksit Bharat” vision.

Nagaraju also highlighted the need to deepen India’s corporate bond market, noting that nearly 90–95% of issuances currently come from highly rated companies.