India's Public Sector Banks Chart Tech-Driven Future with Global Capability Centre Rollout by FY27

India's public sector banks are embarking on a significant technological consolidation, with plans to adopt a unified Global Capability Centre (GCC) strategy by the 2026-27 financial year, according to a report in The Economic Times citing senior banking executives.

The strategy, which will see state-run lenders pool resources and expertise into centralized hubs, is being spearheaded by the State Bank of India (SBI). SBI established the first such GCC among public sector banks earlier this year and is expected to guide the industry-wide rollout.

This initiative forms a core part of the latest EASE 9.0 reform agenda, a framework mandated by the Department of Financial Services to modernize governance, technology, and risk management across public sector banks. The reforms aim to move beyond incremental updates, fostering collaboration to offer comprehensive banking solutions. These are expected to include blockchain-based systems, advanced risk assessment models, and sophisticated fraud detection mechanisms.

"The vision is to prepare our banks to not just adopt technology, but to leverage it for new business models, improved productivity, and scale," one bank executive was quoted as saying. The plans were reportedly discussed in depth during the recent 'PSB Manthan' brainstorming session.

In parallel, banks are evaluating robust 'active-active' data centre models for inclusion in their upcoming five-year business strategies. This architecture ensures continuous operation by maintaining two simultaneously active sites, a critical step for resilience. Furthermore, institutions are preparing to build core AI infrastructure, which involves licensing large language models (LLMs), formulating GPU procurement strategies, and deploying private cloud systems.

The technological push also extends to data security and customer consent. Under EASE 9.0, banks will enhance consent management systems and expand the use of data tokenization and anonymization solutions.

Industry Voices:

"This is a long-overdue structural shift. Pooling tech resources through GCCs can eliminate redundant costs and finally create the agility PSBs need to compete with private and fintech players," said Priya Sharma, a fintech analyst based in Mumbai.

"While the intent is good, the timeline to FY27 feels leisurely. The tech landscape will evolve twice over by then. This risks being another bureaucratic 'strategy' that gets diluted in execution, failing to deliver tangible benefits for customers," argued Arjun Mehta, a former banking consultant known for his critical stance.

"SBI's pioneering GCC in Karnataka has provided a valuable blueprint. A coordinated approach can standardize best practices and create powerful centers of excellence for developing in-house solutions, reducing dependency on external vendors," noted Dr. Anjali Rao, a professor of financial technology.

This report is based on original reporting by Retail Banker International.