{"id":178827,"date":"2026-02-02T01:50:51","date_gmt":"2026-02-02T06:50:51","guid":{"rendered":"https:\/\/alphastreet.com\/india\/?p=178827"},"modified":"2026-02-02T01:50:51","modified_gmt":"2026-02-02T06:50:51","slug":"indias-2026-27-budget-proposes-banking-review-bond-market-measures-and-municipal-bond-incentives","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/indias-2026-27-budget-proposes-banking-review-bond-market-measures-and-municipal-bond-incentives\/","title":{"rendered":"India\u2019s 2026\u201327 budget proposes banking review, bond market measures and municipal bond incentives"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"556\" src=\"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2026\/02\/image-4-1024x556.png\" alt=\"\" class=\"wp-image-178828\" srcset=\"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2026\/02\/image-4-1024x556.png 1024w, https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2026\/02\/image-4-300x163.png 300w, https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2026\/02\/image-4-768x417.png 768w, https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2026\/02\/image-4-1536x834.png 1536w, https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2026\/02\/image-4.png 1769w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>India\u2019s federal budget for 2026\u201327 set out a series of measures for the financial sector, including a comprehensive review of the banking system, steps to deepen corporate and municipal bond markets, reforms for non-banking financial companies, and changes to foreign investment rules, Finance Minister Nirmala Sitharaman said in her budget speech to parliament on Saturday.<\/p>\n\n\n\n<p>Presenting the proposals, Finance Minister Sitharaman said the Indian banking sector currently has strong balance sheets, improved asset quality and coverage across more than 98% of villages. Against this backdrop, she proposed setting up a <strong>High Level Committee on Banking for Viksit Bharat<\/strong> to review the sector and align it with India\u2019s next phase of growth, while safeguarding financial stability, inclusion and consumer protection.<\/p>\n\n\n\n<p>For non-banking financial companies, the Finance Minister said a vision for NBFCs for Viksit Bharat has been outlined with clear targets for credit disbursement and technology adoption. As an initial step to improve scale and efficiency in public sector NBFCs, the budget proposed the <strong>restructuring of Power Finance Corporation and Rural Electrification Corporation<\/strong>.<\/p>\n\n\n\n<p>The budget also proposed a <strong>comprehensive review of the Foreign Exchange Management (Non-debt Instruments) Rules<\/strong> to create a more contemporary and user-friendly framework for foreign investments, consistent with India\u2019s evolving economic priorities, according to the speech.<\/p>\n\n\n\n<p>To deepen domestic debt markets, Finance Minister Sitharaman announced measures for the <strong>corporate bond market<\/strong>, including the introduction of a <strong>market-making framework<\/strong> with suitable access to funds and derivatives on corporate bond indices. The budget also proposed introducing <strong>total return swaps on corporate bonds<\/strong>.<\/p>\n\n\n\n<p>On municipal finance, the Finance Minister proposed an incentive of <strong>\u20b9100 crore<\/strong> for a <strong>single municipal bond issuance of more than \u20b91,000 crore<\/strong> to encourage large cities to access bond markets. She said the existing scheme under AMRUT, which incentivises municipal bond issuances of up to \u20b9200 crore, would continue to support smaller and medium towns.<\/p>\n\n\n\n<p>As part of ease-of-doing-business measures in financial markets, the budget proposed allowing <strong>Individual Persons Resident Outside India (PROIs)<\/strong> to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme. Finance Minister Sitharaman said the individual investment limit under this scheme would be increased from <strong>5% to 10%<\/strong>, while the overall investment limit for all individual PROIs would be raised from <strong>10% to 24%<\/strong>.<\/p>\n\n\n\n<p>The Finance Minister said these financial sector measures are intended to strengthen capital mobilisation, improve market depth and support India\u2019s long-term growth objectives alongside reforms announced in other sectors of the economy.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>India\u2019s federal budget for 2026\u201327 set out a series of measures for the financial sector, including a comprehensive review of the banking system, steps to deepen corporate and municipal bond markets, reforms for non-banking financial companies, and changes to foreign investment rules, Finance Minister Nirmala Sitharaman said in her budget speech to parliament on Saturday. [&hellip;]<\/p>\n","protected":false},"author":2390,"featured_media":178178,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1941,1,5],"tags":[15127,14773,15302,15296,15305,15301,15297,15299,15219,15232,15300,15298,15303,15304,15225],"class_list":["post-178827","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock-analysis","category-finance-stocks","category-latest","tag-banking-sector-india","tag-capital-markets-india","tag-corporate-bond-market-india","tag-fema-regulations","tag-finance-ministry-india","tag-financial-reforms-india","tag-financial-sector-india","tag-foreign-investment-rules-india","tag-india-budget-2026","tag-indian-economy-budget","tag-municipal-bonds-india","tag-nbfcs-india","tag-portfolio-investment-scheme","tag-public-sector-nbfcs","tag-union-budget-2026-27"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2026\/01\/Budget-2026_2.png","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":178897,"url":"https:\/\/alphastreet.com\/india\/indias-2026-27-budget-proposes-new-national-institute-of-design-in-eastern-region\/","url_meta":{"origin":178827,"position":0},"title":"India\u2019s 2026\u201327 budget proposes new National Institute of Design in eastern region","author":"Staff Correspondent","date":"February 2, 2026","format":false,"excerpt":"India\u2019s federal budget for 2026\u201327 included a targeted initiative for the design sector, proposing the establishment of a new National Institute of Design (NID) in the eastern region to address workforce shortages and strengthen design education, Finance Minister Nirmala Sitharaman said in her budget speech to parliament on Saturday. Presenting\u2026","rel":"","context":"In &quot;Analysis&quot;","block_context":{"text":"Analysis","link":"https:\/\/alphastreet.com\/india\/category\/stock-analysis\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2026\/01\/Budget-2026.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2026\/01\/Budget-2026.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2026\/01\/Budget-2026.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2026\/01\/Budget-2026.png?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2026\/01\/Budget-2026.png?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2026\/01\/Budget-2026.png?resize=1400%2C800&ssl=1 4x"},"classes":[]},{"id":178917,"url":"https:\/\/alphastreet.com\/india\/indias-2026-27-budget-proposes-reservoir-development-and-stronger-fisheries-value-chains\/","url_meta":{"origin":178827,"position":1},"title":"India\u2019s 2026\u201327 budget proposes reservoir development and stronger fisheries value chains","author":"Staff Correspondent","date":"February 2, 2026","format":false,"excerpt":"India\u2019s federal budget for 2026\u201327 set out a set of targeted initiatives for the fisheries sector aimed at raising farmer incomes through infrastructure development and better market linkages, Finance Minister Nirmala Sitharaman said in her budget speech to parliament on Saturday. Presenting the proposals, Finance Minister Sitharaman placed fisheries within\u2026","rel":"","context":"In &quot;Analysis&quot;","block_context":{"text":"Analysis","link":"https:\/\/alphastreet.com\/india\/category\/stock-analysis\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2026\/02\/image-10.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2026\/02\/image-10.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2026\/02\/image-10.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2026\/02\/image-10.png?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2026\/02\/image-10.png?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2026\/02\/image-10.png?resize=1400%2C800&ssl=1 4x"},"classes":[]},{"id":178805,"url":"https:\/\/alphastreet.com\/india\/indias-2026-27-budget-proposes-funding-and-reforms-for-city-economic-regions\/","url_meta":{"origin":178827,"position":2},"title":"India\u2019s 2026\u201327 budget proposes funding and reforms for city economic regions","author":"Staff Correspondent","date":"February 2, 2026","format":false,"excerpt":"India\u2019s federal budget for 2026\u201327 set out a framework to develop City Economic Regions (CERs), with dedicated funding, infrastructure planning and transport connectivity aimed at strengthening urban growth centres, Finance Minister Nirmala Sitharaman said in her budget speech to parliament on Saturday. 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