By Bikash Narayan Mishra* in New Delhi, May 27, 2026: Three recent developments, though seemingly unrelated, have quietly exposed a larger challenge before India’s financial system.

The first came from the government’s decision to approve a $1.4 billion sovereign-backed maritime insurance pool, designed to reduce India’s dependence on foreign insurers during geopolitical disruptions in West Asia. The move was meant to ensure that Indian trade does not suffer simply because overseas reinsurers withdraw from risky regions.

The second emerged when Finance Minister Nirmala Sitharaman convened a high-level meeting with banks after concerns were raised globally over advanced artificial intelligence systems such as Anthropic’s “Mythos.” The government has since proposed a real-time threat intelligence-sharing mechanism between banks, CERT-In and financial regulators so that cyber threats can be identified and communicated without delay.

The third came from State Bank of India, which has articulated an ambitious goal of expanding its balance sheet to nearly 25% of India’s GDP by 2030, while aspiring to enter the league of the world’s most valuable banks.
At first glance, maritime insurance, artificial intelligence and banking expansion may appear to belong to separate worlds. But together they reveal one common truth: India now needs financial institutions that are not only large at home but also strategically present across the world.

Beyond Domestic Strength

India’s banking system has undergone a remarkable transformation over the past decade. Public sector banks, once burdened by bad loans and weak profitability, have returned to stability. Balance sheets are stronger, profits are healthier and capital positions have improved.

Yet the global financial system is no longer shaped only by domestic deposits and lending. Increasingly, economic resilience depends on whether a country’s institutions can operate beyond national borders and protect strategic interests abroad.

When war disrupts shipping routes, when cyber threats emerge from foreign technologies, or when access to advanced digital infrastructure is restricted, nations rely not merely on diplomacy but on the strength of their financial institutions.

India has built world-class payment systems and deep domestic banking reach. What it still lacks is a meaningful global banking footprint.

The Warning from AI Access

The recent debate around Anthropic’s advanced AI project has highlighted this gap. Industry reports suggest that NASSCOM had to approach Anthropic seeking access for Indian firms to selected advanced AI systems under Project Glasswing, a restricted programme reportedly involving a handful of global institutions, including firms such as JPMorgan Chase.

Whether or not access eventually expands, the symbolism is important. No major Indian bank or financial institution was initially seen as central to that ecosystem. That absence reflects a broader issue. In a world where technology partnerships increasingly shape economic power, scale alone is not enough; global relevance matters.

Banks that operate internationally gain not only business opportunities but also access to innovation, partnerships and influence in global decision-making.

Learning from Existing Models

India does not need to invent an entirely new framework. The country already has experience using sovereign-backed structures to support overseas acquisitions in strategic sectors. Public sector enterprises such as ONGC Videsh Limited have, over the years, acquired energy assets across Russia, Africa, the Middle East and Central Asia with policy backing from the Indian state.

Those investments were never seen merely as commercial transactions. They were viewed as instruments of national energy security. A similar approach can now be considered for banking. A sovereign-backed banking expansion fund could help Indian banks acquire strategic assets abroad, participate in consortium-led purchases, or build stronger international platforms in regions where India’s trade and geopolitical interests are growing.

Such a mechanism would not amount to government control of banking decisions. Rather, it would provide a framework where the state shares part of the strategic risk while banks execute the commercial vision.

Why Organic Growth May Not Be Enough

Indian banks have traditionally expanded overseas by opening branches in foreign cities. While useful, branch expansion is slow. It rarely provides immediate scale, local market share or technological advantage.

In contrast, many global banks achieved rapid international presence through acquisitions. Countries such as Singapore and the United Arab Emirates have long used sovereign institutions to support outward investment and financial influence abroad. Their financial systems are deeply integrated into global capital flows because their governments recognised early that financial power is part of national power.

India may now need to think in similar terms. If Indian banks are expected to support exporters, infrastructure companies, digital firms and strategic industries worldwide, they must be able to operate where those businesses operate. That requires more than domestic size. It requires international reach.

A Practical Starting Point

One practical source of funding already exists. Public sector banks now pay substantial dividends to the government each year. Those proceeds could be channelled into a special purpose vehicle or Bank Investment Company dedicated to overseas expansion. Instead of these funds put into general revenue, a portion could become growth capital for India’s long-term financial strategy.

This would create a disciplined, sovereign-supported framework through which Indian banks could pursue carefully chosen acquisitions abroad while preserving commercial accountability. The objective would not be aggressive empire-building. It would be resilience.

A Question of Sovereignty

For decades, economic sovereignty was discussed mainly in terms of oil, defence or food security. Today, it must also include finance and technology. The maritime insurance decision shows India is willing to underwrite strategic risk. The AI response shows India recognises emerging digital vulnerabilities. The ambitions of SBI show Indian banking is ready to think bigger.

The next logical step is to connect these developments into a larger vision. India does not simply need bigger banks. It needs Indian banks with a global presence strong enough to protect national interests in an uncertain world.

• Former advisor to the Indian Banks’ Association and a senior banker