Chief Economic Adviser V Anantha Nageswaran urges India to accelerate safeguards around AI in finance as the sector integrates the technology more extensively, highlighting risks of market volatility and job displacement.
India must move quickly to strengthen safeguards around artificial intelligence in finance as banks, fintech firms and markets adopt the technology more widely, Chief Economic Adviser V Anantha Nageswaran said on Friday. Speaking at ASSOCHAM’s India International Fintech Festival, Nageswaran argued that policymakers cannot wait for a major failure before tightening oversight, because the risks are emerging alongside the benefits.
He said AI could improve lending and risk management by helping firms judge creditworthiness more accurately and spot stress earlier. But he also warned that the same tools can create new hazards in trading and market behaviour, including herd-like moves and sharper swings in volatility, particularly when algorithms react at speed across borders.
In earlier remarks reported by Business Standard, Nageswaran said the rise of AI in finance creates new duties for regulators, especially as India becomes more closely tied to global capital markets. He said the next decade of financial stability will depend heavily on how well authorities understand and supervise risks in digital and AI-enabled systems, adding that technology alone cannot create stronger markets without regulators, investors and innovators working together.
Nageswaran has also linked AI to a wider policy challenge: how to protect jobs and raise productivity at the same time. At the AI Summit 2026, according to LiveMint and The Indian Express, he described the technology as a test of state capacity and warned that India could squander its demographic edge if workers are displaced faster than they can be retrained. He has also said AI should be treated as a tool to augment human work rather than replace it, provided there is proper human oversight over design, training, testing and governance.
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