Union Budget 2026: FM Announces High Level Committee on Banking, NBFC Restructuring and Market Reforms

The Union Budget presented on February 1, 2026, outlines a series of measures aimed at strengthening India’s banking and financial ecosystem, highlighting improved balance sheets, high profitability and extensive rural coverage. 

Key Measures Announced in the Banking Sector Budget 2026 

Finance Minister Nirmala Sitharaman proposed the formation of a high level committee on banking for Viksit Bharat to review the sector’s structure, readiness and alignment with growth objectives while safeguarding stability, inclusion and consumer protection. The committee will assess public sector banks, non‑banking financial companies and regulatory frameworks. 

NBFC Restructuring and Technology Targets 

The budget sets clear credit disbursement and technology adoption targets for non‑banking financial companies under the Viksit Bharat framework. Emphasis is placed on digital lending platforms, data analytics and risk management tools to enhance efficiency and outreach. 

Read More: PSU Bank Stocks in Focus at Budget 2026: Bank of Maharashtra, PNB, Bank of India, SBI and Others! 

Public Sector NBFC Reorganisation 

To improve scale and operational efficiency, the Power Finance Corporation and Rural Electrification Corporation are slated for restructuring. The move aims to create larger, more resilient public sector NBFCs capable of supporting infrastructure financing. 

Regulatory Review of Foreign Exchange Management Rules 

A comprehensive review of the Foreign Exchange Management non debt instruments rules is proposed to create a contemporary, user‑friendly framework for foreign investments, aligning with evolving economic priorities. 

Impact on Public Sector Banks and Asset Quality 

State‑run banks reported a combined net profit of ₹93,675 crore in the first half of the current fiscal, while gross non‑performing assets fell to multi year lows. The reforms are expected to sustain profitability and maintain asset quality across the banking system. 

Conclusion 

The 2026 budget introduces a high level banking committee, targeted NBFC reforms, restructuring of key public sector entities and a review of foreign exchange regulations, reflecting a focus on stability, inclusion and operational efficiency. 

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