India’s banks are in their best shape in decades. Gross bad loans fell to 1.8 per cent in March 2026, a multi-decadal low, and net NPAs to 0.4 per cent. The economy grew 7.8 per cent in the first quarter of FY27. The question Shaktikanta Das, Principal Secretary to the Prime Minister, put at a BFSI summit recently was what that strength must now build.
His answer came in five parts –. Each measures how well India can turn its savings into the roads, factories and old-age security a developed nation needs.
“India’s credit intensity, as measured by the private credit to GDP ratio, needs to grow in a sustained manner,” Das said. He asked larger lenders to carry infrastructure and manufacturing, and smaller ones to reach Tier-2 and Tier-3 cities, small businesses and farms.
Niti and RBI reports
The bond market has grown, but few can enter it. Outstanding corporate bonds tripled from Rs 17.5 lakh crore in FY15 to Rs 53.6 lakh crore in FY25, Niti Aayog reports.
About 98 per cent of issues are private placements closed to the public, and only 3.8 per cent of the stock changes hands in a month, the RBI’s Financial Stability Report shows. Niti Aayog estimates the market could reach Rs 100- 120 lakh crore by 2030 with reform. Five Pillars to finance Viksit Bharat Das sets India’s financial system five tests Cities are only beginning to borrow. By March 2026, 22 municipal corporations had raised Rs 4,540.34 crore across 31 issues.
PM’s Principal Secretary asked larger lenders to carry infrastructure and manufacturing, and smaller ones to reach Tier-2 and Tier3 cities, small businesses and farms
Municipal paper is under 1 per cent of rupee bond sales, against 7 per cent in the US. Mumbai’s civic body plans to raise Rs 9,500 crore by December, about twice what every city before it has raised. The Union Budget offers Rs 100 crore to any city issuing Rs 1,000 crore or more. Insurance is large but thin. India is the world’s 10th largest insurance market, with assets of Rs 74.44 lakh crore.
Yet premiums equal 3.7 per cent of GDP, half the global 7.3 per cent, and life cover has fallen for three straight years to 2.7 per cent, IRDAI’s FY25 annual report records. FDI up to 100 per cent and GST-free individual policies are now in place to close that gap.
The pension base Pensions have a base to build on. NPS and Atal Pension Yojana assets crossed Rs 16 lakh crore in October 2025, across more than nine crore subscribers, the Pension Fund Regulatory and Development Authority (PFRDA) said. What India gains is plain – domestic savings funding domestic growth, cities paying for their own water and transit, and families that do not face old age or illness alone.
