As part of the financial sector reforms unveiled in the Union Budget for 2026-27, the government plans to restructure the Power Finance Corporation and the Rural Electrification Corporation to enhance scale and efficiency in public sector NBFCs. The vision for NBFCs under Viksit Bharat includes specific goals for credit disbursement and technology integration.
Finance Minister Nirmala Sitharaman announced the formation of a High-Level Committee on Banking for Viksit Bharat to conduct a comprehensive review of the financial sector and align it with India’s future growth trajectory. Emphasizing the strength of the Indian banking sector, she highlighted robust balance sheets, record profitability levels, and extensive coverage across villages in the country.
In a bid to modernize foreign investments in line with India’s economic priorities, the Finance Minister proposed a thorough review of the Foreign Exchange Management (Non-debt Instruments) Rules in the Union Budget. Additionally, the budget introduces a market-making framework to facilitate access to funds and derivatives on corporate bond indices, including total return swaps on corporate bonds.
To incentivize the issuance of larger municipal bonds by major cities, the budget offers a Rs 100 crore incentive for single bond issuances exceeding Rs 1,000 crore. The existing scheme supporting smaller and medium towns through AMRUT will also continue. Furthermore, to streamline investment processes, Individual Persons Resident Outside India (PROI) will now be allowed to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme.
