Budget 2026: India Eyes Global Banking Giants with PSU Mergers, Capital Rule Review

• Finance Minister Nirmala Sitharaman's Budget 2026 includes a new expert panel, "Banking Committee for Viksit Bharat," to reform India's financial sector.
• DFS Secretary M Nagaraju indicated the committee will examine regulatory capital buffers and potential further consolidation of Public Sector Banks (PSBs).
• The committee aims to ensure adequate credit flow and build globally competitive banks for India's 2047 developed-nation goal.
• Nagaraju stated that a review of capital ratios is possible, as current rules were fixed long ago and new methods for capital deployment exist.
• PSB consolidation is 'not off the table,' with the goal of creating large institutions capable of competing with global top banks, as no Indian bank is currently in the top 40 globally.

Why It Matters: India plans major banking reforms, including PSU mergers and capital rule changes, to create global banking leaders by 2047.