Budget 2026: Preparations underway for major banking reforms! An announcement regarding a Governance Bill for PSU Banks is expected..

The government may make a major announcement regarding the banking sector in the upcoming budget. Reports suggest that the Finance Ministry is preparing to introduce the Bank Governance Bill, aimed at making public sector banks more professional, robust, and accountable, on par with private and foreign banks. This bill is being drafted not only to address current needs but also with Banking Vision 2047 in mind.

What is the Banking Governance Bill?
The Banking Governance Bill is a proposed law that will completely upgrade the functioning, board structure, and management system of public sector banks. Its objective is to make government banks more independent, professional, and performance-driven.

Bill to be drafted with Banking Vision 2047 in mind

While drafting this bill, consideration will be given to what the Indian banking sector should look like by 2047. Its provisions will be determined keeping in mind technology, risk management, governance, and global standards, so that Indian banks can compete at the international level.

Focus on strengthening bank boards
The most important part of the bill will be strengthening the bank boards. The composition of the bank boards will be discussed. Public sector bank officials have long complained that their salaries are significantly lower than those in private banks. It is believed that this bill may also address salary structures, incentives, and performance-based pay systems. Although the bill may take 3-4 months to be finalized, its announcement in the budget is possible.

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