AI can make more Indians bankable, to shape this decade of banking: RBI Governor
Mumbai, Aug 11
Reserve Bank of India Governor Sanjay Malhotra on Tuesday said artificial intelligence has the potential to transform credit delivery, improve customer service and accelerate financial inclusion in India, urging banks to adopt the technology responsibly and shape their AI journey with intent rather than letting it evolve by default.
Delivering the inaugural address at the FIBAC 2026 conference here, Malhotra described AI as a defining force for Indian banking, comparable to the impact of economic liberalisation in the 1990s and digitalisation in the 2010s.
"The theme of the conference - Artificial Intelligence - has been well chosen. It is apt and timely. It is a theme that, I believe, will define this decade of Indian banking as decisively as liberalisation defined the 1990s and digitalisation defined the 2010s," Malhotra noted.
He said AI should not be viewed as a standalone technology project but as a new way of conducting banking business and making decisions.
"I also like the use of the word "playbook". Artificial Intelligence is not a single technology to be procured, nor a project to be completed. It is a new way of doing business, of running a bank. It is a shift in how we evaluate risk, serve customers, price capital, and organise institutions," he stated.
"Many banks in this room are already deploying AI, and many more are considering it. The only question is whether you shape the AI journey with intent, or you let it shape you by default," the RBI Governor added.
Making a strong case for adoption of artificial intelligence, Malhotra said the central bank sees AI as a capability that should be responsibly harnessed rather than merely treated as a risk that needs to be controlled.
According to him, AI can significantly improve the economics of credit delivery by helping banks evaluate borrowers who lack formal credit histories.
"I will be unambiguous: the Reserve Bank sees AI as a capability to be responsibly harnessed and not merely as a risk to be contained," he mentioned.
— IANS
Reader Comments
Valid point about AI making credit accessible—my cousin runs a small textile unit in Surat and despite 8 years of GST filings, he gets rejected by traditional banks for a ₹5 lakh loan. If AI can use transaction data to prove his creditworthiness, why not? Just hope they don't make it a black box. Transparent algorithms are essential, otherwise we'll have another exclusion problem like we saw with CIBIL scores for rural borrowers.
Interesting to see an Indian central bank governor being this progressive about AI. Back home the Fed is still debating the basics. The comparison to 1990s liberalisation is apt—that opened up our economy, this could open up banking for the underserved. My only concern is data privacy. With Aadhaar-linked KYC and now AI profiling, the government needs to tighten the Personal Data Protection Bill implementation. The risks are real.
"Shape the AI journey with intent or let it shape you by default"—what a powerful line. But I've seen how many banks still struggle with basic IT infrastructure from the 2010s digitalisation push. Some of our public sector banks can't even keep their mobile apps running during peak hours! They need serious tech upgradation before dreaming about AI. Also, cyber fraud is already a huge issue—wonder how AI will help there, or make it worse.
Good speech, but I'm not fully convinced it addresses the root problem. The reason many Indians aren't "bankable" today is because banks have historically singled out certain communities and small entrepreneurs as high-risk. AI algorithms trained on biased historical lending data will only replicate that discrimination. We need debiasing protocols written into the RBI's AI adoption framework from day one, not after problems surface. Otherwise the credit gap will only widen. 🤔
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