‘Developed India’ needs more big, world-class banks: FM

Mumbai: Finance Minister Nirmala Sitharaman address the gathering during the 12th SBI Banking and Economics Conclave 2025, in Mumbai, Thursday, Nov. 6, 2025.
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PTI

India needs many big and world-class banks. The Government will engage with the RBI and banks towards this end, said Union Finance Minister Nirmala Sitharaman.

This observation comes in the backdrop of the Modi Government’s vision to transform the country into a developed nation by 2047.

“For that (building big and world-class banks), of course, we will have to sit and talk with the RBI and also with the banks themselves to see how they want to take it forward,” Sitharaman said in response to a question on whether India needs big banks at State Bank of India’s 12th Banking and Economic Conclave.

She observed that the Government will take into account the banking regulator’s views on the idea of building larger banks.

“So, there is a lot of work to do prior to my saying yes, I have taken a call or the government is looking at it this way or that way…. It is not by creating (big banks) from among those which exist today just by amalgamation… that can also be one of the ways.

“But you need an ecosystem and also an environment in which more banks can operate and grow. So that environment is actually well established in India, but I need it to be a bit more timely. So some work is happening on it,” Sitharaman said.

Currently, only two Indian banks — SBI (ranked 43) and HDFC Bank (73) — figure among the S&P Global Market Intelligence ranking of the world’s 100 largest banks by assets.

In 2021, the Finance Minister noted that India needs at least four or five different SBI-sized banks to meet the growing needs of the economy.

Referring to the mega consolidation of ten public sector banks (PSBs) into four in 2020, Sitharaman, at the Indian Banks’ Association’s 74th AGM in 2021, said: “One of the driving forces for the amalgamation (of PSBs) was that we need to scale up banking to meet the new changing and growing requirements of the economy.

“But that was thought of even before the pandemic. Now all the more reason why we would need four or five SBIs in the country.”

Derivatives trading

On a question on the government’s position on trading in futures and options, the FM said that the government was “not here to shut the door on F&O trading,” but to make investors aware of the risks involved.

“At the same time, investors have the responsibility to understand the risks involved,” she said.

GST reforms

Sitharaman emphasised that the rationalisation of the GST rates in September 2025 actually kick-started the biggest virtuous cycle for India.

“And if the virtuous cycle actually speeds up at this pace, growth numbers can be what you want,” she said.

Published on November 6, 2025