Sitharaman Warns Indian Banks Must Adapt to AI and Global Challenges

Speaking at the inauguration of the new premises of SBI's Local Head Office in Pune, Sitharaman said the move would strengthen banking outreach across Maharashtra.

"I praise the State Bank of India's decision to establish a local head office in Pune to serve the rest of Maharashtra," she said.

"When global markets are in a churn, our exports take a beating, but to their credit, I must say that despite all the tariffs and other challenges, they are performing because of their ingenuity. They are doing fine because they have found newer markets," she added.

Sitharaman further said sectors such as manufacturing, agriculture, tourism, and information technology require continuous backing to maintain India's growth trajectory.

"Unless our domestic manufacturing, agricultural growth, tourism, IT, and other sectors are given constant support, India's growth story will be difficult to maintain, and in that regard, banks have a very big role to play," she said.

She also announced plans to set up a committee to recommend changes for the future of Indian banking.

"There is a need for Indian banks to adapt to future challenges, so we are planning the formation of a committee to recommend changes for Indian banking to reach where we need to be by 2047," Sitharaman said.

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 cybersecurity violations 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.

- ANI