FM Sitharaman Warns Indian Banks to Build New Defenses Against AI Cyber Threats

Her remarks followed a high-level meeting held on Thursday with Union Minister for Electronics and Information Technology Ashwini Vaishnaw, along with RBI, NPCI, CERT-In and chiefs of Scheduled Commercial Banks, to assess risks from advanced AI models that could be misused to weaponise software vulnerabilities.

Sitharaman said Indian banks have remained largely free of any major incident involving cyber security violation over the decades because of sustained digitisation, regular system upgrades, firewalls and customer safety measures.

"This has been an ongoing exercise and Indian banks have done very well for themselves that there has not been a major incident over the decades," she said. However, she cautioned that the challenge from advanced AI is different and less understood. "What we've had and therefore proved ourselves -- that we are careful and protective of our customers -- may not be sufficient. They need to be there, they need to improve, they need to grow. But we need something new and something far more versatile to counter the newer threats which are likely to come," she said.

The minister noted that the Ministry of Electronics and Telecommunications is actively engaging with global governments and technology companies to gauge the evolving risk landscape and India's preparedness. Following Thursday's meeting, also attended by DFS Secretary M. Nagaraju and CERT-In DG Dr Sanjay Bahl, banks have been directed to work together under a coordinated institutional mechanism led by the Indian Banks' Association. SBI Chairman, as IBA head, will lead the effort. In the coming weeks, banks will assess where more investments are needed, what technologies can be adopted, and how AI itself can be used to counter AI-based threats. Sitharaman clarified that this is not a new committee but an IBA-led process to identify vulnerabilities and review vendor dependencies.

She urged banks to bring in the best available cybersecurity professionals and specialised agencies to strengthen defensive and monitoring capabilities, and to immediately report any suspicious activity to CERT-In and other authorities. A robust real-time threat intelligence sharing mechanism among banks, CERT-In and other agencies was also advised to ensure early detection and quick dissemination of emerging threats.

On the geopolitical front, Sitharaman acknowledged the impact of the West Asia crisis, particularly the effective closure of the Strait of Hormuz, which has pushed crude oil prices higher.

"Because of the Strait of Hormuz crisis, we'll see what best we can do. These are constantly moving challenges. You can't club all of them and say each challenge is being addressed," she said, adding that each issue will be responded to in its own context.

The Minister also drew a line between the cybersecurity agenda and other policy matters such as LPG supply monitoring, handled by a group of ministers led by Defence Minister Rajnath Singh, and support for exporters affected by US tariffs, which was launched last year. She reiterated that the Terms of Reference for the banking sector's 2047 roadmap are deliberately broad to give the committee space to recommend the structure and scale of banks needed for the future.

- ANI