The government will soon set up a high-powered banking committee that will examine reforms for the sector in Viksit Bharat, Finance Minister Nirmala Sitharaman said on Monday.

And the two-day deliberations among public sector banks (PSBs) and public financial institutions (PFIs) at the PSB Confluence on Monday and Tuesday will act as a template for the panel to build upon, she added.

“The intensive discussions of today and tomorrow come at a time when we expect the announcement on the high-powered committee to look into banking for Viksit Bharat. Soon, the committee will be announced,” Sitharaman said at the PSB Confluence. “The material you produce from the two days' discussions will hopefully provide substantive material for the committee to review. The committee would have that material with them even as they deliberate to give us their recommendations,” she added.

Sitharaman had announced a high-level committee on banking for Viksit Bharat in the Budget for 2026-27 (FY27). This committee will comprehensively review the sector and align it with India’s next phase of growth while safeguarding financial stability, inclusion and consumer protection.

Sources in the government indicate that the committee is likely to be set up as soon as this month.

Meanwhile, the finance ministry’s Department of Financial Services (DFS) is holding the two-day conclave of PSBs and PFIs in New Delhi to discuss seven themes: deposit mobilisation, banking for youth, supporting the investment cycle, supporting global capability centres (GCCs), agriculture & horticulture value chain infrastructure, innovation in the credit card business, and priority sector lending.

The DFS has very carefully and thoughtfully decided the seven themes for the conclave, the finance minister added. “The DFS has spent time looking into the details of what each of these seven topics should be focusing on, so the content material on each of them is well researched—bringing in the best practices from around the globe,” Sitharaman said.

The two-day conclave to discuss global best practices in banking comes right after Prime Minister Narendra Modi, in his Independence Day address, set the aim for Indian banks to rank among the top five globally.

Currently, only State Bank of India (SBI) features in the 45th position among the top 50 banks by asset size globally, according to S&P Global’s latest ranking.

According to experts, the next frontier of growth for Indian banks lies in increasing scale, reach and balance sheet strength. “Global lenders operate at significantly larger asset sizes and international scale. Bridging this gap will require progress across four key strategic dimensions: balance-sheet expansion, stronger corporate bond markets, deeper participation in global trade, and Artificial Intelligence-led transformation to enhance productivity and strengthen risk management,” said Pratik Shah, National Financial Services Leader at EY India.

“A few large banks with global scale can enhance India's presence in international financial markets; mergers can accelerate scale, but they are not the sole determinant of global competitiveness,” Shah said.

“A diverse economy like India needs a balanced and multi-tiered banking ecosystem. Indian banks must also continue to build scale through sustained credit growth, deeper participation in infrastructure and manufacturing financing, stronger support for corporate, trade and cross-border capital flows, and expansion of international franchises,” he added.

The government had undertaken a round of bank mergers in 2020 when it consolidated 27 state-owned banks into 12 large banks.

The high-level banking committee is also expected to examine bank consolidation along with all other aspects related to strengthening the banking ecosystem, Sitharaman had said previously in February.

At the PSB Confluence, the minister mentioned that the time was just right for the government and banks to focus on reforms once the committee shares its recommendations. “There couldn’t have been a better time to talk about banking for Viksit Bharat, especially after the grind that you all have gone through and come out of it,” she said.

Data shows that the net profit of PSBs nearly trebled over the past five years to a record ₹1.98 trillion in FY26. Their aggregate gross non-performing asset ratio also declined to an all-time low of 1.9 per cent as of March 31, 2026, from 7.3 per cent as of March 31, 2022.

“Once the committee gives its report, it is for us to rapidly move in that direction; understanding that the Viksit Bharat 2047 is actually not too far away,” Sitharaman said.