As part of the ongoing Azadi Ka Amrit Mahotsav celebrations, the Ministry of Finance has highlighted a comprehensive set of reforms that have reshaped India’s financial ecosystem—particularly public sector banking, credit flow to MSMEs, and the digital payments landscape.
Over the last few years, the Government of India has taken bold and transformative measures to instill credit discipline, strengthen governance in Public Sector Banks (PSBs), and promote responsible lending practices. One of the most impactful tools in this effort has been the Insolvency and Bankruptcy Code (IBC), which has introduced a structured mechanism for early recognition and resolution of stressed assets. Alongside this, the Central Repository of Information on Large Credits (CRILC), established by the RBI, now enables close monitoring of high-value loans and helps detect willful defaults and frauds early on.
A major innovation in managing non-performing assets has been the creation of the National Asset Reconstruction Company Limited (NARCL)—tasked with consolidating stressed loans across banks and optimizing recovery. These initiatives are supported by advanced Early Warning Systems, driven by third-party data, which allow banks to proactively identify risk and take timely corrective action.
The EASE (Enhanced Access and Service Excellence) reforms have been pivotal in transforming PSBs into more accountable, technology-enabled, and customer-centric institutions. These reforms focus on digital banking, risk management, governance, and HR practices, ensuring progress is benchmarked and transparent.
To further support this transformation, the Banking Regulation (Amendment) Act, 2020 and the recent Banking Laws (Amendment) Act, 2025 have strengthened the governance of co-operative banks and streamlined regulatory frameworks—ensuring better depositor protection and audit standards.
Empowering MSMEs
Recognizing the crucial role of Micro, Small, and Medium Enterprises (MSMEs) in employment and GDP growth, several schemes have been introduced to improve access to credit.
The Mutual Credit Guarantee Scheme (MCGS-MSME), launched in January 2025, offers guarantees for loans up to ₹100 crore for MSME projects focused on equipment and machinery purchase.
The Emergency Credit Line Guarantee Scheme (ECLGS), which concluded in March 2023, provided liquidity support worth ₹3.68 lakh crore to over 1.19 crore businesses, with ₹2.42 lakh crore directed to 1.13 crore MSMEs.
A New Credit Assessment Model, introduced in March 2025, now leverages digital data to enable faster and more objective loan appraisals for both existing and new borrowers.
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has approved 1.22 crore guarantees worth ₹10.50 lakh crore as of July 2025—offering up to 85% guarantee cover for loans up to ₹10 crore.