A New Era: Building World-Class Banks in India

Finance Minister Nirmala Sitharaman called for Indian banks to achieve world-class status during the 12th SBI Banking and Economics Conclave 2025. Highlighting the necessity for larger, more competitive banks, Sitharaman engaged with the Reserve Bank and lenders to discuss plans for significant advancements within the industry.

She asserted that increased credit flow is crucial to spur economic growth, indicating that a reduction in GST rates is poised to initiate an investment cycle. The government has initiated steps by divesting from IDBI Bank, selling stakes to Life Insurance Corporation of India, with expectations that this move will attract investors.

The strategy aligns with broader public sector bank consolidation efforts, demonstrated by significant mergers since 2017 that have effectively streamlined banking operations. The Finance Minister also emphasized infrastructure development, noting a fivefold increase in capital expenditures over the past ten years.