New Delhi: The Union Budget 2026-27 has proposed setting up a ‘High Level Committee on Banking for Viksit Bharat’ to comprehensively review the financial sector and align it with India’s next phase of growth, while safeguarding financial stability, inclusion and consumer protection.
Presenting the Budget in Parliament, Finance Minister Nirmala Sitharaman said the panel will assess the system at a time when banks are reporting strong balance sheets, record profitability and improved asset quality, with banking coverage now extending to over 98% of villages.
As part of a broader push to improve efficiency in public sector financial institutions, the Budget also proposes to restructure Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) to achieve scale and sharpen operational effectiveness among PSB-linked NBFCs. The government outlined a “Viksit Bharat” vision for NBFCs, with targets for credit growth and technology adoption to support infrastructure and development financing.
On capital markets, the Budget announced a market-making framework with suitable access to funds and derivatives on corporate bond indices, alongside proposals to allow total return swaps on corporate bonds, a move aimed at improving liquidity and price discovery in the corporate debt market.
To spur urban infrastructure financing, the government will offer a ₹100 crore incentive for a single municipal bond issuance exceeding ₹1,000 crore, while continuing the AMRUT-linked support scheme for smaller issuances by medium and small towns.
The Budget also seeks to ease cross-border investment norms. Individuals resident outside India (PROI) will be permitted to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme, with the per-investor limit raised to 10% from 5% and the aggregate cap for all such investors increased to 24% from 10%.
In parallel, Sitharaman reiterated plans for a comprehensive review of FEMA (Non-debt Instruments) Rules to create a more contemporary and user-friendly framework for foreign investments