As part of the financial sector reforms announced in the Union Budget for 2026-27 on Sunday, the government proposes to restructure the Power Finance Corporation and the Rural Electrification Corporation to achieve scale and improve efficiency in the public sector NBFCs.

The vision for NBFCs for Viksit Bharat has been outlined with clear targets for credit disbursement and technology adoption.

Finance Minister Nirmala Sitharaman said in Parliament that a High-Level Committee on Banking for Viksit Bharat will be set up as part of the Budget proposal. It will comprehensively review the financial sector and align it with India’s next phase of growth, while safeguarding financial stability, inclusion and consumer protection, she added.

The Indian banking sector today is characterised by strong balance sheets, historic highs in profitability, improved asset quality and coverage exceeding 98 per cent of villages in the country, she pointed out.

The Finance Minister also proposed a comprehensive review of the Foreign Exchange Management (Non-debt Instruments) Rules in the Union Budget to create a more contemporary, user-friendly framework for foreign investments consistent with India’s evolving economic priorities.

The Union Budget 2026-27 also proposes a market-making framework with suitable access to funds and derivatives on corporate bond indices, along with a proposal for total return swaps on corporate bonds.

To encourage the issuance of municipal bonds of higher value by large cities, the Union Budget proposes an incentive of Rs 100 crore for a single bond issuance of more than Rs 1,000 crore. The current scheme under AMRUT, which incentivises issuances up to Rs 200 crore, will also continue to support smaller and medium towns.

To enhance ease of doing business, Individual Persons Resident Outside India (PROI) will be permitted to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme. The Union Budget also proposes to increase the investment limit for an individual PROI under this scheme from 5 per cent to 10 per cent, with an overall investment limit for all individual PROIs to 24 per cent, from the current 10 per cent.