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High-Level Panel On Banking Reforms Soon? Here’s What FM Nirmala Sitharaman Says
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When asked whether the panel would recommend mergers among public sector banks, the finance minister cautions against narrowing the scope of the exercise.
Union Finance Minister Nirmala Sitharaman presents Union Budget 2026-27. (File Photo)
The government will soon set up a high-level committee to review India’s banking sector and chart out reforms needed to create large, globally competitive lenders capable of financing a developed India, Finance Minister Nirmala Sitharaman has said.
In an interview with PTI Videos, Sitharaman said the proposed panel will focus on preparing the banking system to meet the funding needs of Viksit Bharat. “We want the committee to tell us what kind of things we need to do so that banking is made available for funding Viksit Bharat,” she said.
When asked whether the panel would recommend mergers among public sector banks, the finance minister cautioned against narrowing the scope of the exercise. “It is for India’s banking sector to be made big enough, big enough in the sense, made or primed to take care of Viksit Bharat funding. You have to reach Viksit Bharat destination…it needs money, it needs financing, it needs credit, it needs banking facility to reach the common man,” she said.
On the timeline for setting up the committee, Sitharaman said the government would move quickly. “We will do it at the earliest,” she noted.
The proposal was formally announced in the Union Budget on February 1. “I propose setting up a ‘High Level Committee on Banking for Viksit Bharat’ to comprehensively review the sector and align it with India’s next phase of growth, while safeguarding financial stability, inclusion and consumer protection,” she had said in her Budget speech.
As part of broader efforts to achieve scale and efficiency in public sector non-banking financial companies (NBFCs), the Budget also proposed restructuring of Power Finance Corporation (PFC) and Rural Electrification Corporation (REC). Responding to questions on whether a merger between the two is likely, Sitharaman said, “A lot of work has happened in the ministry concerned. They have come up with this expectation. Let’s see how they play it out.”
REC is already a subsidiary of PFC. In March 2019, PFC acquired a 52.63 per cent stake in REC from the government for about Rs 14,500 crore, gaining management control. Both entities are Navratna central public sector enterprises and play a crucial role in financing power generation, transmission and distribution projects.
Last week, the PFC board gave in-principle approval for the merger of REC with itself, following the Budget announcement. The government has positioned this move as part of a larger consolidation strategy in the financial sector, even as the proposed high-level committee prepares to take a comprehensive look at banking reforms needed for India’s next phase of growth.
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February 08, 2026, 13:04 IST
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Business
Airlines halt Puerto Vallarta flights after violence following Mexican cartel leader’s killing
Smoke billows from burning vehicles amid a wave of violence, with torched vehicles and gunmen blocking highways in more than half a dozen states, following a military operation in which a government source said Mexican drug lord Nemesio Oseguera, known as “El Mencho,” was killed, in Puerto Vallarta, Jalisco, Mexico, February 22, 2026, in this screen grab obtained from a social media video.
Stringer | Reuters
U.S. and Canadian airlines halted flights to Puerto Vallarta and Guadalajara in Mexico after violence broke out in the country in the wake of the Mexican army’s killing of a cartel leader.
The U.S. State Department on Sunday told U.S. citizens to shelter in place, citing “ongoing security operations and related road blockages and criminal activity.”
Air Canada, American Airlines, Delta Air Lines, Southwest Airlines, United Airlines and others canceled flights to Puerto Vallarta, a popular tourist destination on Mexico’s Pacific coast, and to Guadalajara, which is also in the Jalisco state. Airlines waived change fees for affected travelers.
Flights to other major airports in the country, like Mexico City and Cancun, weren’t impacted by the unrest.
Stranded passengers line up at Guadalajara Airport in Tlajomulco, Jalisco, Mexico, on February 23, 2026, to claim compensation for flights that were canceled or postponed the previous day.
Ulises Ruiz | Afp | Getty Images
Several Mexican states also canceled school on Monday after the country’s army killed Nemesio Rubén Oseguera Cervantes. Known as “El Mencho,” he led one of fastest-growing criminal networks in Mexico, notorious for trafficking fentanyl, methamphetamine and cocaine to the United States and staging brazen attacks against government officials who challenged it, The Associated Press reported.
He was killed during a shoot-out in his home state of Jalisco, AP said.
Airlines routinely suspend service due to unrest and infrastructure problems to avoid having passengers, crews and aircraft stranded.
Business
FM Sitharaman rules out roadmap for PSU bank mergers, panel to review sector reforms – The Times of India
The government currently has no roadmap for mergers among public sector banks, Finance Minister Nirmala Sitharaman said, indicating that consolidation is not under active consideration even as a new banking reform panel is set to review the sector’s future.“I am not familiar with any roadmap…there isn’t one,” Sitharaman said in a media briefing after her post-Budget customary address to the Board of the Reserve Bank of India, PTI reported.She clarified that bank consolidation was neither discussed during Budget preparations nor raised in recent deliberations, though the proposed High-Level Committee on Banking for Viksit Bharat will examine all aspects related to strengthening the banking ecosystem.“Bank consolidation was not a subject here, nor was it a subject before the Budget, but the Committee, which is now being appointed, once the terms of reference are given, they will look into every aspect of how to strengthen Indian banking,” she said.In the Union Budget 2026-27, Sitharaman proposed setting up a ‘High Level Committee on Banking for Viksit Bharat’ to comprehensively review India’s banking sector and align it with the country’s growth goals while safeguarding financial stability, inclusion and consumer protection.“I propose setting up a ‘High Level Committee on Banking for Viksit Bharat’ to comprehensively review the sector and align it with India’s next phase of growth, while safeguarding financial stability, inclusion and consumer protection,” she had said in the Budget speech on February 1.The committee is expected to draw up a blueprint aimed at creating mega lenders capable of meeting the financing needs of a developed India.As part of broader financial sector reforms, the Budget also proposed restructuring Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) to achieve scale and improve efficiency in public sector NBFCs. REC is a subsidiary of state-owned power sector lender PFC, and both institutions play a key role in financing power generation, transmission and distribution projects.In March 2019, PFC completed the acquisition of a majority stake in REC Ltd by transferring Rs 14,500 crore to the government. PFC acquired 103.94 crore shares, representing a 52.63 per cent stake, along with management control, at Rs 139.50 per share following approval from the Cabinet Committee on Economic Affairs.Commenting on the banking sector’s health, RBI Governor Sanjay Malhotra said banks are adequately capitalised and capable of sustaining credit growth for the next four to five years, supporting the economy’s financing needs.He added that deposit growth is now keeping pace with credit expansion.On moderation in net foreign direct investment (FDI), Malhotra said gross FDI inflows have continued to rise.Last year, he said, “It increased by about 14-15 per cent. Even this year, gross FDI has increased, and the growth rate is also high. It’s because of repatriations of those people who had done earlier FDI. It has gone out. The net (FDI) has decreased”.Similarly, he said Indian companies are increasingly investing overseas as domestic economic measures have strengthened confidence, which has also contributed to lower net FDI levels.
On the day that Trump announced the IEEPA tariffs last April, the tariffs on his products went from zero to 30%, Smeaton told BBC Radio 4’s Today programme. Afterwards, they went up to 100%, then 145%, and eventually a rate of 30% was paid. This later changed to 20% and, for a few hours on Friday after the ruling, it was zero again, then up to 10%, and on Saturday, 15%.
Airlines halt Puerto Vallarta flights after violence following Mexican cartel leader’s killing
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