The Reserve Bank of India urges lenders to harness AI for inclusive credit access, balancing innovation with oversight to ensure responsible deployment within the financial sector.
India’s central bank is pushing lenders to treat artificial intelligence as a practical tool for widening access to credit, not simply as a hazard to be restrained. Speaking at the FIBAC 2026 conference in Mumbai, Reserve Bank of India Governor Sanjay Malhotra said banks should develop their own AI strategies and use the technology to reach borrowers who often fall outside conventional underwriting. The RBI published the full text of his remarks. Malhotra said AI should be “a capability to be responsibly harnessed and not merely as a risk to be contained.”
Traditional lending decisions still lean heavily on credit scores, repayment histories, income documents and formal business accounts. That approach can exclude workers and small firms that have steady earnings but limited paperwork. Malhotra said AI systems could help banks assess alternative signals such as cash flows, GST filings, utility payments and digital platform records, allowing lenders to judge repayment capacity more accurately and potentially draw more people into formal finance.
The governor also pointed to India’s digital public infrastructure as a foundation for that shift. He cited Aadhaar, UPI, DigiLocker, the Account Aggregator framework, ONDC and the Unified Lending Interface as tools that can move data and payments more efficiently through the financial system. In his view, AI could reshape lending in much the same way that UPI altered digital payments, according to the RBI’s published remarks.
At the same time, the central bank has been moving to put guardrails around the technology. Reuters-style reporting on the RBI’s draft model risk framework shows the bank wants board-approved governance for AI and machine learning models, with human oversight, bias testing and the ability to shut systems down quickly if problems emerge. The draft also calls for grievance redressal and stronger controls over third-party providers, underlining that the RBI wants banks to expand credit access without surrendering accountability to automated systems.
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