New Delhi, Aug 17 (IANS) Finance Minister Nirmala Sitharaman said on Monday that the government will soon announce the composition of a high-powered committee to recommend how the banking sector should play its role in supporting the country’s transformation into a developed economy by 2047. Addressing the inauguration of the two-day conclave of heads of public sector banks and financial institutions here, Sitharaman said, "Once the committee gives its report, we will move fast on the recommendations," she said.Finance Minister Sitharaman first proposed the setting up of a high-level committee on banking during the presentation of the Union Budget for 2026-27 to review the sector's alignment with India's growth goals. "The committee will look at the role of banks towards Viksit Bharat, as 2047 is not too far away, as we are in 2026, so less than 20 years is what we have before us,” the Finance Minister remarked.

She also highlighted the banking sector's markedly improved asset quality as providing an ideal opportunity for pushing ahead with reforms now.She urged public sector banks to leverage their strengthened balance sheets to support the next phase of economic growth and prepare for banking reforms aimed at building a financial system aligned with the government’s Viksit Bharat 2047 vision.The Finance Minister said the banking sector was entering the next phase from a position of strength, with non-performing assets (NPAs) at their lowest levels.With NPAs at the lowest ever Indian banking has seen, there cannot be a better position of strength with which banks can take on reforms, she pointed out.She said the ideas emerging from the banking leadership could provide substantive inputs to the committee and help the government move rapidly on its recommendations.

Sitharaman emphasised the need for banks to focus particularly on the country’s young population, noting that 29 per cent of Indians are in the 15-29 age group. Banks need to expand access to financial services for young people, including education loans, entrepreneurship finance and investment products, Sitharaman observed.She also called for the banking sector to generate practical and implementable ideas to meet emerging financing needs, saying the sector should be ready “to rev up the Indian economy” once the banking committee gives its recommendations.Department of Financial Services Secretary Sanjay Lohiya said the asset quality of public sector banks had registered a dramatic improvement, with gross NPAs declining from a peak of 14.6 per cent in March 2018 to a record low of 1.93 per cent in March 2026 while net NPAs fell from 8 per cent to 2.39 per cent during this periodThe improvement has strengthened the balance sheets of public sector banks and enhanced their capacity to support growth, he said.

However, he said banks would need to sharpen their competitiveness as technology reshapes business models, customer expectations evolve and new areas of economic activity emerge.Lohiya identified deposit mobilisation as a key priority as household savings preferences change. Banks would need to strengthen their deposit base through better service, convenience, product innovation and sustained customer relationships.He also highlighted opportunities in financing global capability centres, agriculture and horticulture value chains, and priority-sector lending. On

/IANS