Overview
- Finance Minister Nirmala Sitharaman proposed a High-Level Committee on Banking for Viksit Bharat to conduct a comprehensive review and recommend reforms centered on stability, inclusion and consumer protection.
- The terms of reference and membership are yet to be disclosed, with Department of Financial Services secretary M. Nagaraju indicating consultations will precede the final brief.
- Industry observers say the panel could examine corporate ownership of banks, the 26% voting-rights cap, FDI approval processes, bank consolidation and conversion of large NBFCs into banks, depending on its remit.
- The Budget also proposes restructuring Power Finance Corporation and Rural Electrification Corporation to achieve greater scale and efficiency in public-sector NBFCs.
- Market measures include a corporate-bond market-making framework with index-linked derivatives and total return swaps, a Rs 100 crore incentive for municipal bond issues above Rs 1,000 crore, a review of foreign investment rules, and higher Portfolio Investment Scheme limits for non-resident investors to 10% per investor and 24% in aggregate.