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Key Points

RBI Deputy Governor T Rabi Sankar highlighted AI's transformative potential at the Global Fintech Fest 2025. He emphasized that while AI brings unprecedented efficiency and innovation, it requires strong oversight to prevent financial instability. The central bank official stressed that safety must be built into AI systems from the design phase rather than added later. Sankar also showcased RBI's own responsible AI initiative, MuleHunter.ai, which helps combat financial fraud with greater accuracy.

Key Points: RBI Deputy Governor T Rabi Sankar Warns AI Needs Strong Oversight

  • AI promises extraordinary efficiency and inclusion in financial services
  • Must be accompanied by rigorous oversight to safeguard financial stability
  • Financial AI applications must not destabilize markets or payment systems
  • Safety must be built into AI design from conception to deployment
  • RBI's MuleHunter.ai demonstrates responsible AI with lower false positives
  • Job displacement concerns depend on how we adapt and govern AI use
2 min read

AI promises efficiency and inclusion but needs strong oversight: RBI Dy Governor at GFF 2025

RBI Deputy Governor emphasizes AI's dual promise and peril at GFF 2025, calling for built-in safety measures to protect financial stability and consumer trust.

"AI carries a dual narrative of promise and peril - T Rabi Sankar"

Mumbai, October 8,

Artificial intelligence (AI) is transforming industries with unprecedented speed, but it also poses serious risks if left unchecked, said Reserve Bank of India (RBI) Deputy Governor T Rabi Sankar on Tuesday.

Addressing the Global Fintech Fest (GFF) 2025 in Mumbai, he cautioned that while AI promises extraordinary efficiency, inclusion, and innovation, it must be accompanied by rigorous oversight to safeguard financial stability.

"AI is demonstrating its ability in ways unimaginable a few years back. India, too, has been a notable participant in this journey. But as with all powerful innovations, AI carries a dual narrative of promise and peril," Sankar said, speaking at a session on 'Responsible AI for Finance: Balancing Innovation with Financial Stability' at Global Fintech Summit 2025 at Mumbai.

He stressed that the integration of AI into financial systems must be treated with profound responsibility. "In finance, the margin for error is narrower, as financial institutions are built on trust and economies prosper on stability," he said. RBI Deputy Governor added, AI in financial services should be designed with safety at its core, not as an afterthought.

"AI systems must be subjected to rigorous oversight and layered with inherent checks. Financial AI applications, in particular, must not be allowed to destabilize markets, payment systems, or consumer confidence. Safety must be built into the design from conception to real-world deployment. Retrofitting safeguards later can be inadequate and even destabilizing," he noted.

Sankar underlined Central Bank's focus on ensuring that technological advancement aligns with financial prudence. Citing the example of RBI's own innovations, he spoke about 'MuleHunter.ai', a system developed by the RBI Innovation Hub to combat the growing menace of mule accounts and fraudulent accounts used for money laundering and cybercrime.

"Unlike the traditional rule-based systems currently used, MuleHunter offers greater accuracy and precision with significantly lower false positive rates. The model has already been deployed in about 20 commercial banks," he said.

Responding to concerns about job displacement due to AI, Sankar said that its long-term impact would depend on whether it follows the trajectory of past transformative technologies like the industrial revolution or the invention of electricity. "Whether AI displaces jobs or creates new opportunities will hinge on how we adapt and govern its use," he added.

- ANI

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Reader Comments

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Rohit P
As someone working in fintech, I completely agree with the Deputy Governor. We've seen how AI can revolutionize banking, but without proper safeguards, it could lead to massive frauds. Safety first approach is the way to go!
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Arjun K
Job displacement is my biggest concern. While AI brings efficiency, what about the thousands of bank employees? The government needs to ensure proper reskilling programs are in place. We can't leave people behind in this digital revolution.
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Sarah B
Interesting perspective! In developed markets, we're seeing similar debates. India's approach of balancing innovation with regulation could become a model for other emerging economies. The focus on financial inclusion through AI is particularly noteworthy.
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Vikram M
MuleHunter.ai deployed in 20 banks already? That's impressive speed! This shows RBI is not just talking but actually implementing practical AI solutions. Hope this reduces the online fraud cases we keep hearing about. 🙏
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Kavya N
While I appreciate the cautious approach, I hope this doesn't become another case of over-regulation that stifles innovation. Indian startups need room to experiment and compete globally. Balance is key, but let's not be too restrictive.
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Michael C
Working with Indian fintech partners, I've seen how quickly AI is being adopted.

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