India’s banking sector has emerged from a prolonged asset-quality clean-up in a much stronger position, with non-performing assets (NPAs) at their lowest level on record, finance minister Nirmala Sitharaman says.

As reported by Firstpost, when speaking at the opening of PSB Confluence 2026, Sitharaman said the improvement in asset quality had restored confidence in public sector banks (PSBs), allowing them to shift their attention from crisis management to long-term reforms and growth.

The two-day conclave held on August 17 and 18 brought together senior executives from PSBs to examine the challenges facing the banking industry and develop practical measures to strengthen the sector.

Sitharaman said the Department of Financial Services (DFS) had prepared research papers covering all seven themes selected for discussion. The studies incorporate international best practices and are intended to generate recommendations that banks can translate into concrete actions.

The finance minister said the substantial improvement in banks’ asset quality creates an opportunity to enter a new phase focused on expansion and structural reform.

She said discussions at the conclave could also contribute to the work of a proposed high-powered committee on banking for Viksit Bharat or Developed India. The government is expected to announce the committee, which will examine the future role and direction of India’s banking sector.

Sitharaman also stressed the importance of younger customers to the future of banking. Nearly 29% of India’s population is between 15 and 29 years old, she noted, making this demographic an increasingly important consideration for banks’ business strategies and financial planning.

The conclave focused on seven areas: deposit mobilisation, banking services for young people, financing the investment cycle, global capability centres, infrastructure supporting agriculture and horticulture value chains, priority-sector lending and the future of credit-card businesses.