India needs bigger, more global-scale banks for 2047 goal: Banking leaders

To achieve Viksit Bharat goal, India must build more globally-scaled banks with robust financial strength, deep talent pool, and tech sophistication, said experts at Business Standard BFSI Summit 2025

India needs more globally-competitive banks with strong financial foundations, skilled talent, and advanced technology to finance large-scale projects, create jobs, and support the vision of Viksit Bharat 2047, said banking sector leaders at Business Standard BFSI Insight Summit 2025 on Wednesday.

 

In a conversation with Business Standard, State Bank of India MD Ashwini Tewari, Union Bank of India MD & CEO Asheesh Pandey, Bank of India MD & CEO Rajneesh Karnatak, and Bank of Baroda MD & CEO Debadatta Chand made a compelling case for creating larger, globally competitive banks.

 

They said that large banks play a pivotal role in ensuring the stability and growth of the global economy, leveraging their resources and expertise to absorb shocks, manage risks effectively, and maintain financial system resilience.

 

'India needs at least 2 banks in global top 20': SBI MD Ashwini Tewari

According to SBI's MD Tewari, India’s growing corporate landscape demands banks with the scale to underwrite large projects and absorb risks meaningfully.

 

“Today, many Indian companies are very large, and for each bank to contribute meaningfully, it is important that the size goes up. As banks grow larger, they are able to underwrite larger cheques and take that risk,” said Tewari.

 

He added that the capacity to invest in technology, cybersecurity, and AI-driven analytics is directly tied to a bank’s size. Smaller banks, he noted, often struggle to keep up with the required technology spend, making scale not a luxury but “a necessity".

 

Tewari also highlighted that larger banks operate more efficiently. “Globally, the cost-to-assets ratio has come down to 1 per cent or lower, while in India it’s still 1.5–2 per cent. As banks grow, costs get spread, and efficiency improves,” he said.

 

Referring to India’s past bank mergers, he said, “All the banks that went through consolidation have shown improved performance, like in capitalisation, profitability, and efficiency. The case for large banks is a clear yes.”

 

Tewari called for at least two Indian banks to be in the global top 20, while also supporting the coexistence of smaller, niche, and community-oriented banks catering to specific sectors or regions. 

'Bigger banks needed for a demand-driven, de-dollarising world': UBI MD Asheesh Pandey

UBI's Asheesh Pandey said that India’s growth ambitions and the evolving global order both point to an urgent need for stronger, larger banks.

 

“When we talk about Vishwaguru India and our 2047 aspirations, we must understand that we are a demand-driven economy. To support projects worth ₹10,000–15,000 crore, you need balance sheets of that size,” Pandey observed.

 

He noted that 15 years ago, most projects were in the ₹800–1,500 crore range, but new-age sectors like semiconductors and renewable energy now demand far higher underwriting capacity. “With ₹200–400 crore capital, you cannot underwrite a ₹10,000-crore project,” he said.

 

Pandey also linked the push for larger banks with global de-dollarisation trend, saying as trade diversifies across currencies and new cross-border payment systems emerge, India’s large banks must be equipped to handle complex international transactions.

 

“As the world changes, larger balance sheets will mean better resilience, stronger capital adequacy, and global credibility,” he added. 

'India’s economic scale demands 3-4 global-scale banks': BoI MD Rajneesh Karnatak

Bank of India's Rajneesh Karnatak contextualised the debate on India’s rapid economic growth trajectory. “It took India 65 years to reach its first trillion dollars of GDP. The next trillion came in seven years, and the third in just two years,” he said. “At this pace, as we aim for $40 trillion by 2047, India will undoubtedly need large banks to support the scale.”

 

Karnatak emphasised that both public and private sector banks must feature among the world’s largest. “We need at least two to three large banks or maybe four in the top 100 globally, measured by total business, assets, and market capitalisation,” he said.

 

However, he also stressed inclusivity in India’s banking structure. “We have over 1.4 billion people, diverse demographics, and varying banking needs, from rural to metro. So, while we need large banks, there is also space for mid-sized and small banks to thrive,” Karnatak added. 

'Big is beautiful, especially in banking': BoB MD Debadatta Chand

Bank of Baroda's Debadatta Chand said larger banks enjoy superior underwriting capacity, technology investment ability, and network optimisation, all of which improve efficiency and competitiveness.

 

“As India migrates to a mature market, we need a banking structure with a few large global banks at the top, niche banks in the middle, and smaller banks at the base,” he explained.

 

Chand added that for India to maintain presence in the global top 100 banks, a position it once held more strongly, it must develop institutions with significant international operations. “Any large global bank is not just big domestically; it’s dominant outside its home country too,” Chand noted.

 

He also pointed out that global top-tier banks are strong not only in traditional banking but also in para-banking services like private banking, wealth management, and capital markets. “For India to create truly global banks, we must build strength across these verticals,” Chand said.

From consolidation to global competitiveness

The consensus across India’s top bankers is clear, scale is central to India’s banking future. Whether it comes through further consolidation or organic growth, larger balance sheets will be key to underwriting India’s infrastructure ambitions, absorbing global shocks, and leading in fintech innovation.

 

As India aims for its next leap, from the world’s fifth-largest economy to a global powerhouse, its banks will need to grow in lockstep, not just in size but in sophistication, reach, and resilience.

About Business Standard BFSI Summit 2025

The Business Standard BFSI Insight Summit 2025, India’s largest financial sector forum, is underway in Mumbai from October 29 to 31, bringing together top policymakers, regulators, and industry leaders to discuss the future of India’s financial ecosystem. The three-day event features keynote addresses, panel discussions, and fireside conversations on critical issues shaping the banking, financial services, and insurance sectors.