FM Highlights Need for More World-Class Banks as Talks with RBI Progress

• FM Nirmala Sitharaman says India requires larger, world-class banks to support growth
• Government and RBI are working on building a stronger banking ecosystem
• Private investment and credit growth show signs of revival post-GST reforms

Finance Minister Nirmala Sitharaman on Thursday said the government is in talks with the Reserve Bank of India (RBI) and public sector banks to build an ecosystem that supports the creation of large, world-class banks in India.

Speaking at the Banking and Economics Conclave organised by SBI, Sitharaman said discussions have already begun and several preparatory steps are in progress. “India needs big and world-class banks. We are talking to the RBI and banks to see how this can be taken forward. It’s not just about mergers but about creating an environment where more banks can grow and operate dynamically”, she said.

The Finance Minister noted that while earlier consolidations helped strengthen the public banking sector, the current focus is on building a more vibrant ecosystem. The first phase of bank mergers began in 2017 and continued through 2020, creating stronger PSBs like SBI, Bank of Baroda, and others.

Sitharaman also highlighted India’s resilience amid global uncertainty. She credited the next-generation GST reforms, implemented in September 2025, for boosting domestic consumption and credit demand. Bank lending surged by Rs 4.1 lakh crore during the festive period this year, reflecting strong consumer and industrial activity.

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On private investments, the Finance Minister said there are visible signs of revival. “Private sector capacity building and credit expansion have restarted, setting off a virtuous economic cycle for India,” she added.