FM Sitharaman Chairs Seventh Pre-Budget Meeting with BFSI Experts
During the meeting, NBFCs and banks presented key demands such as refinance window, SARFAESI threshold reduction, uniform FD-MF taxation and removal of TDS on NBFC interest income.
FM - Nirmala - sitharaman - taxscan
FM - Nirmala - sitharaman - taxscan
Finance Minister Nirmala Sitharaman chaired the seventh pre-budget consultation meeting with experts from the banking, financial services and insurance sector in New Delhi on 19 November 2025.
The meeting was part of the government’s preparation for the Union Budget 2026 to 2027. Union Minister of State for Finance Pankaj Chaudhary, the Secretary of the Department of Economic Affairs, the Chief Economic Adviser and senior officials from the Department of Financial Services were also present.
The discussions revolved around capital mobilisation, credit growth, risk management, financial inclusion and regulatory reforms. Participants also talked about digital transformation, cybersecurity requirements and the integration of fintech with traditional banking systems. These ideas were shared to help shape a stable and growth oriented financial framework.
According to ET Now, non banking financial companies made several key requests during the meeting. NBFCs asked the Finance Minister to create a dedicated refinance window to boost liquidity and support faster lending.
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They also requested that refinancing norms be aligned with those of the National Housing Bank. Another major demand was to reduce the minimum loan size under the SARFAESI Act from 20 lakh rupees to 1 lakh rupees to allow quicker recovery in stressed loan cases.
NBFCs further urged the government to remove tax deducted at source on interest income, similar to the exemption available to banks. They said this would help lower compliance costs and improve operational efficiency.
The banking sector also shared its challenges. Bank representatives requested uniform tax treatment for fixed deposits and mutual funds. They pointed out that a larger share of household savings is moving into mutual funds which is affecting banks’ ability to maintain their CASA ratio. Banks also asked for an increase in the income deduction limit after NPA provisioning and suggested that the current 8.5 percent cap be raised.
Industry participants, as reported by The Week, also discussed ways to improve investor confidence including rationalising securities transaction tax and capital gains tax structures for alternative investment funds. They also explained the need for stronger digital infrastructure and better data protection as financial services become more technology-driven.
This meeting followed earlier consultations with stakeholders from agriculture, manufacturing and capital markets. While the government has not released detailed minutes, reports suggest that the feedback collected will play a significant role in shaping the upcoming Union Budget.
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