Banker's promise: Building trust for tomorrow in India's banking system

Every New Year gives the banking community a rare pause — to look beyond balance sheets and introspect whether they are building an ecosystem that India will bank upon tomorrow.

 

The world around us continues to be in a state of flux. Global trade is fragmenting, currencies are volatile and capital moves faster than conviction.

 

In many economies, banking systems are feeling the strain of slowing growth and tightening financial conditions. Yet, in this uncertain global environment, India’s banking sector has quietly rebuilt its foundations. Today, it stands stronger, more resilient and far more confident than it was a decade ago.

 

This strength did not come overnight. It came from hard choices from a regulator that chose long-term stability over short-term comfort. The regulatory reforms, whether on capital, provisioning or risk management, are not about control; they are about trust. Trust that banks will be able to lend through cycles, protect depositors in turbulent times and finance India’s ambitions without repeating the excesses of the past.

 

As Gen Z enters the workforce, expectations from banking are being fundamentally reshaped. Banks are no longer perceived as buildings or branches, but as experiences — instant, intuitive, transparent and ethical. This generation values sustainability, privacy and purpose as much as price. For them, trust is earned not by legacy, but by relevance.

 

This generation will define the future of Indian banking, and the responsibility of the banking industry is to meet them where they are, speak their language and design systems that respect their time and intelligence. Product design must, therefore, anticipate needs rather than merely respond to them

 

This is why the role of technology has moved from the periphery to the very core of banking. Artificial intelligence (AI), data analytics and digital public infrastructure are enabling banks to personalise services, expand access and reduce friction. But technology alone is not the answer. Digital banking must still feel human, especially when customers are vulnerable, anxious or in need of guidance.

 

While digital innovation races ahead, inclusion must remain central. True inclusion is not defined by apps alone, but it is achieved when a farmer in a remote village, a small shop owner, or a senior citizen without a smartphone feels just as confident engaging with the banking system. The convergence of physical and digital banking, what we narrate as phygital, is what will ensure that progress leaves no one behind.

 

As India moves towards becoming Viksit Bharat, banks will be required to play their role in financing infrastructure, climate-aligned projects, newage manufacturing as well as global and domestic acquisitions by Indian companies. Allowing banks to support corporate acquisitions, for instance, is not just a regulatory tweak. It reflects the confidence in the maturity of India’s banking system and its ability to manage complex risks responsibly.

 

Similarly, the shift towards forward-looking credit assessment frameworks and refined capital norms is about ensuring that banks remain strong not only in good times, but when conditions turn difficult. Regulation, in this sense, is not about restriction but about preparedness.

 

It is clear that scale without simplicity in banking creates friction. Processes must be future ready, transparent and digital first. True efficiency does not come from volume alone but from ease of engagement. But simplification cannot compromise on rigor. Compliance will increasingly build into workflows rather than being layered from top.

 

When regulation and innovation move together, trust follows.

 

Banking is ultimately a profession of trust. Depositors entrust banks with their life savings. Businesses rely upon them to realise their ambitions. The young trust the banking system with their first financial decisions.

 

The journey ahead will not be linear. But if banking remains anchored in strong governance, invests in its people, listens to customers and embraces reforms with conviction, Indian banking will not merely keep pace with the nation’s growth; it will help shape it.

 

I remain deeply optimistic. Not because the numbers look good today, but because the foundation feels right for tomorrow.

 

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The writer is chairman, State Bank of India. This column has been edited for space.