समाचार Samāchār · Business · 31 October 2026

Six months to redesign Indian banking: Suresh N Patel to lead the Centre’s review

The Finance Ministry has set up the High Level Committee on Banking for Viksit Bharat. Its brief runs from prudential norms and capital needs to the cost of credit, priority sector lending and AI.

India has opened a full review of how it banks. On 30 October the Finance Ministry constituted the High Level Committee on Banking for Viksit Bharat. Finance Minister Nirmala Sitharaman had announced it in her Budget speech for 2026-27. The committee has six months to report.

Suresh N Patel chairs it. He is a former Central Vigilance Commissioner and a former MD and CEO of Andhra Bank. The members include RBI Deputy Governor Shirish Chandra Murmu, former RBI Deputy Governor N S Vishwanathan and former Indian Bank MD and CEO Padmaja Chunduru. The Joint Secretary (Banking) in the Department of Financial Services is member secretary. It is a bench of people who have run banks and regulated them.

The brief is wide. Review regulations and prudential norms against global practice and set a roadmap for globally competitive banks. Assess the long-term capital needs of banks, development finance institutions and NBFCs, and where that money should come from. Examine why the cost of capital differs across businesses and suggest how to draw in private investment. Review priority sector lending and the Lead Bank Scheme. Review the legal frameworks for regional rural and cooperative banks. Write an AI and digital roadmap for banks, with cyber safeguards and skilling. The government may add more.

The starting point is a system with 12 public sector banks, 21 private banks, 11 small finance banks and five payments banks. The RBI has issued only four universal banking licences since 2000. Business Standard reports that industry expects the committee to revisit corporate entry into banking, the 26% cap on voting rights and conversion of large NBFCs into banks. None of these is named in the terms of reference.

Credit is the fuel of both engines, manufacturing and services. A country that wants to make for the world needs banks big enough to fund it and cheap enough for the small firm to borrow. Fewer rules that do more, and AI used to price risk better, would serve that. The test is in April.

What a founder takes from it: Watch the line on the cost of capital. If the committee narrows the gap between what a large firm and a small one pay for money, both engines of the economy get cheaper fuel. Founders should send it evidence, not complaints.