Sanjay Malhotra and RBI officials call for cautious yet ambitious adoption of AI in Indian banking, emphasising transparency, trust, and risk management to shape the decade’s fintech landscape.
Sanjay Malhotra has urged banks to treat artificial intelligence with both ambition and caution, saying the technology could shape this decade in much the same way digitisation defined the 2010s and liberalisation changed Indian finance in the 1990s. Speaking at a FICCI-IBA conference in Mumbai, the Reserve Bank of India governor said the lenders that succeed will not simply be the fastest adopters, but the ones that understand clearly what they are putting into use.
Malhotra said AI could help strengthen and scale existing public digital infrastructure, including the Unified Lending Interface and the account aggregator framework, which were designed as shared platforms that private firms can build on. He argued that well-used AI could speed up financial inclusion by closing long-standing gaps, but warned that careless deployment could also deepen exclusion and create new sources of instability that banks and regulators may struggle to control.
That warning echoes the RBI’s broader message on emerging technology. Deputy governor Swaminathan J has said AI can transform banking by improving efficiency and inclusion, but only if fairness, accountability and trust remain central. He has also cautioned that biased models, misuse of customer data and opaque decision-making could undermine confidence, while deputy governor M. Rajeshwar Rao has called for measured adoption, strong governance and careful risk management rather than excitement alone.
The central bank has also linked AI with a wider push on digital resilience and fraud prevention. According to reports on Malhotra’s recent remarks, the RBI has been pressing banks to expand the use of technology to improve customer service and lower costs while tightening cybersecurity, internal controls and fraud detection systems such as MuleHunter. Taken together, the messages suggest the regulator wants banks to move quickly on innovation, but not at the expense of transparency, stability or human oversight.
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