Finance minister Nirmala Sitharaman has underscored the need for banks to provide “predictable support” to sustain India’s consumption-driven growth amid rising global uncertainties.
Her remarks come at a time when analysts expect moderation in bank credit growth in FY27, alongside a potential uptick in stressed assets — particularly in MSME and retail segments — if second-order effects of the West Asia conflict disrupt supply chains.
“Domestic consumption and the domestic economic wheels moving well have stood by us even during times when global markets are in a churn. Our exporters, in spite of tariffs and other global challenges, are doing all right because they are able to find newer markets,” Sitharaman said at the inauguration of State Bank of India’s local head office in Pune on Friday.
She added that sustaining India’s growth trajectory would require continued support across key sectors. “Looking at India’s size and aspirations, it is important for us to recognise that the Indian consumption story has to be kept up. Unless our domestic manufacturing, agricultural growth, tourism, IT and related services sectors are given that constant and predictable support, India’s growth story will be difficult to keep up, and in that, banks have a very big role to play,” she said.
Sitharaman also indicated that a committee announced in the Budget “will soon be formed” to recommend the future evolution of the banking sector, including the need for large and technologically advanced institutions.
More versatility
The finance minister called for greater adaptability in the banking system in response to rapid advances in artificial intelligence, citing emerging risks from next-generation models such as Claude Mythos that can identify and exploit software vulnerabilities faster than human experts.
“MeitY is in active engagement with various authorities, global governments and technology firms to understand how these developments will play out and the preparedness required in India. Yesterday’s meeting was in that context,” she said.
Highlighting the need for proactive measures, Sitharaman said, “We need something new and far more versatile to counter emerging threats. In the coming weeks, banks will engage more closely to assess where investments are needed, what technologies can be deployed, and how AI itself can be leveraged to address these challenges.”
IDBI divestment
Sitharaman reiterated that the government will continue with the strategic disinvestment of IDBI Bank.
Earlier this month, the Centre indicated it would seek revised financial bids from potential buyers after initial offers fell short of the reserve price.
