Sanjay Malhotra, governor of the Reserve Bank of India, urges the financial sector to actively shape AI development, signalling a strategic shift to future-proof India’s banking system amid evolving global pressures.
Reserve Bank of India Governor Sanjay Malhotra said India should actively direct the development of artificial intelligence in banking and finance rather than allow the technology to reshape the sector by default. Speaking at the FIBAC 2026 conference in New Delhi on Tuesday, Malhotra said AI adoption would require institutions to rethink how they assess risk, serve customers, price capital and organise their operations. Earlier, Reuters-style reporting on his meetings with bank chief executives showed that AI was already high on the regulator’s agenda, alongside geopolitical pressures and new expected credit loss rules.
“Doing business, doing banking, and so on, requires a total change in mindset,” Malhotra said. “It’s a shift in how we evaluate risk, serve customers, price capital, organize institutions. Happy to know many of the banks are already doing it. Some of you are considering doing it.” His comments fit a broader pattern in his public remarks since taking over as the RBI’s 26th governor, when he has repeatedly urged the financial system to adapt to structural change rather than wait for it.
The warning also builds on a wider policy push by the central bank for a stronger and more flexible financial system. In recent remarks, Malhotra has called for deeper and more efficient markets to support India’s resilience against global headwinds, saying liquidity and wider participation are essential for stability and growth. At the same time, the RBI has been weighing how digital infrastructure can support a more integrated financial architecture, including a proposed unified marketplace that would connect identity, payments and data on top of existing public rails such as Aadhaar and UPI.
Malhotra’s case for adaptation also reflects the experience of a technocrat who has moved across public policy, administration and finance. Media profiles have noted that he studied computer science at the Indian Institute of Technology, Kanpur, before completing a master’s in public policy at Princeton University. In earlier speeches, including one at Princeton, he has argued for questioning established systems and embracing continuous learning, a theme that now appears to frame his approach to AI, banking supervision and the RBI’s broader reform agenda.
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