Indian banks in strongest position for reforms as NPAs hit record low: Finance Minister Ms. Nirmala Sitharaman
- IBEF
- August 18, 2026
Finance Minister Ms. Nirmala Sitharaman said that non-performing assets (NPAs) in India’s banking sector have fallen to their lowest-ever level, placing banks in a stronger position to undertake the next phase of reforms. Addressing the inaugural session of the two-day PSB Confluence 2026, she said the significant improvement in banks’ balance sheets followed a challenging clean-up process and had strengthened the credibility of the banking sector. The improved position allows banks to pursue reforms from a position of strength rather than crisis management. The Department of Financial Services (DFS) has prepared detailed research papers covering all seven themes selected for discussion at the confluence, drawing on global best practices and aimed at developing concrete and actionable recommendations. The paper on youth examines India’s young population across different age groups and stages of life, with nearly 29% of the population in the 15-29 age group, highlighting the need for banks to factor demographic trends into their planning and strategies.
The seven themes being discussed at the confluence are deposit mobilisation, banking for youth, supporting the investment cycle, global capability centres, agriculture and horticulture value-chain infrastructure, priority sector lending and reimagining the credit card business. The discussions are also linked to the Government’s planned constitution of a high-powered committee on the role of banking in achieving the Viksit Bharat vision. The outcomes and recommendations from the confluence are expected to provide substantive inputs to the proposed committee as it examines the future role of the banking sector. The finance minister urged participants to focus on practical and implementable ideas, with bankers expected to take responsibility for implementing the recommendations. The two-day confluence is aimed at identifying reforms and strategies to strengthen India’s banking sector and align it with the country’s long-term economic and development goals.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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