India’s Chief Economic Adviser V. Anantha Nageswaran calls for proactive regulation of artificial intelligence in the financial sector to prevent vulnerabilities amid rapid technological advancement.
India should move early to put guardrails around artificial intelligence in finance rather than wait for problems to emerge, Chief Economic Adviser V. Anantha Nageswaran said on Friday, as policymakers and lenders grapple with how quickly the technology is moving into core financial tasks.
Speaking at ASSOCHAM’s India International Fintech Festival, Nageswaran said AI could sharpen credit assessment, improve fraud detection and help firms spot signs of financial stress sooner. But he warned that the same systems could also create new vulnerabilities if safety and security are treated as afterthoughts, particularly as AI tools become more autonomous.
His comments build on a broader warning from Indian regulators this year. In April, Reserve Bank of India deputy governor J. Swaminathan flagged risks including bias, opacity, data misuse, model risk and cyber threats, saying unchecked adoption could deepen systemic weaknesses. In February, Nageswaran himself said AI-enabled finance would create new policy duties for regulators and called for stronger supervision as India integrates more deeply with global capital markets.
The CEA also struck a sceptical note about the current enthusiasm surrounding AI, arguing that the full economic case for the technology may only become clear once today’s market euphoria fades. Until then, he said, businesses and policymakers should keep their focus on preserving financial stability and avoiding overconfidence in tools that are still evolving. Other recent remarks from Nageswaran have stressed that AI’s productivity gains need to be matched by skilling, institutional readiness and inclusive growth if India is to capture the benefits without widening inequality.
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