India Plans to Set Up Digital Only Banks and NBFCs

India plans to establish "digital-only" banks and non-bank financial companies (NBFCs) to ensure that credit system business continuity is not affected even in exceptional times.

In her first public appearance in front of the Atlantic Council think tank, Union Finance Minister Nirmala Sitharaman said the government was trying to achieve macroeconomic stability by increasing bank capital and foreign exchange reserves. Sitharaman is in Washington, DC to attend the International Monetary Fund and World Bank Annual Spring Meeting.

Mr. Sitharaman said the government is taking reform measures, including the supply side, as well as responding to the pandemic. She told her audience that the focus of the government was to promote capital spending without losing sight of its moral obligations to the underprivileged.

The government has extended the free distribution of about 800 million people for another six months. This cost about Rs 80,000 crore. The minister said he is in talks with semiconductor manufacturers to mobilize investment in at least 13 future sectors, including solar panels and hydrogen emissions.