8 Key Government and Industry Initiatives Reshaping the BFSI Sector In FY 2025

As we approach FY 2025, a host of exciting initiatives, driven by both the government and industry, are set to transform the BFSI landscape, making it more inclusive, efficient, and tech-savvy. These changes are already making waves and promise to have a lasting impact. Let’s take a closer look at some of the key initiatives leading this transformation that are discussed in the India Decoding Jobs Report 2025.

Digital payments have become a vital part of everyday life in India, with the Unified Payments Interface (UPI) leading the charge. UPI saw a remarkable 57% growth in FY24, processing over 131 billion transactions. And the future looks even brighter, with digital payments expected to triple by FY 2029. Thanks to continuous support from the government and the Reserve Bank of India (RBI) in enhancing digital infrastructure, UPI is becoming even more widespread, making payments quicker, easier, and safer for people everywhere. Whether it’s paying for groceries or sending money across the country, UPI is making transactions seamless.

Farmers in India have long faced challenges in accessing credit, but things are starting to change. The RBI, alongside the Reserve Bank Innovation Hub (RBIH), is working to digitize the Kisan Credit Card (KCC) loan system. This effort will streamline the process, reducing paperwork and wait times traditionally associated with agricultural financing, making it easier for farmers to secure loans. With faster access to funds, farmers will be able to invest in better equipment, seeds, and irrigation, helping improve agricultural productivity and overall rural development.

India’s insolvency laws have undergone significant updates in recent years, and the government isn’t stopping there. A new tech-driven platform for Insolvency and Bankruptcy Code (IBC) cases will speed up the process, provide greater transparency, and reduce delays. By adding more National Company Law Tribunal (NCLT) benches and expanding pre-packaged insolvency procedures, the government is making it easier for businesses to recover from financial distress and get back on track.

With a growing demand for skilled professionals in the BFSI sector, the PM Internship Scheme offers a fantastic opportunity for young people to gain hands-on experience. Through partnerships with major banks like HDFC and ICICI, the government is providing internships across a variety of roles, from finance to technology. This initiative gives students and recent graduates practical experience while offering a monthly stipend, helping to shape the future leaders of the BFSI sector.

The Union Budget 2024 includes measures designed to boost job creation, especially in the BFSI sector. The government will offer a ₹15,000 financial grant for each new employee joining the formal workforce, along with an additional ₹72,000 reimbursement to employers through EPFO contributions. These incentives are expected to encourage BFSI companies to hire more workers, especially as banks and insurance firms expand to meet the growing demand for digital services and customer-facing roles.

As financial regulations become increasingly complex, the BFSI sector is turning to regulatory technology (RegTech) for help. RegTech uses tools like AI and machine learning to streamline compliance and risk management. By 2032, global spending on RegTech is expected to reach $67 billion. These investments will help banks and insurers navigate the complex regulatory landscape while reducing the risk of non-compliance.

India's mutual fund industry has seen remarkable growth, with assets under management (AUM) increasing sevenfold over the past decade. This growth is driven by greater financial literacy and a shift toward more formal investment channels. While there might be some slowing down, experts believe Asset Management Companies (AMCs) are still set to thrive. With a growing middle class and more people becoming investors, the future looks promising for this sector.

The unsecured retail lending space may see slower growth in the coming months due to tighter regulations. As a result, banks and NBFCs will focus on reducing their Non-Performing Assets (NPAs) to strengthen their financial position. However, areas like affordable housing and Microfinance Institutions (MFIs) are likely to keep growing, with factors like good monsoons providing a much-needed boost to these segments.