‘AI Could Reshape Banking’: RBI Governor Sanjay Malhotra Urges Responsible Adoption

Reserve Bank of India (RBI) Governor Sanjay Malhotra said artificial intelligence could reshape credit delivery, customer service and financial inclusion. He urged banks to adopt AI responsibly and deliberately.

Speaking at the FIBAC 2026 conference, Malhotra described AI as a defining force for Indian banking. He compared its potential impact with economic liberalisation in the 1990s and digitalisation in the 2010s.

The RBI Governor said banks must treat AI as more than a standalone technology project. Instead, institutions should view it as a new approach to banking and decision-making.

Malhotra said AI could alter how banks assess risk, serve customers, price capital and structure institutions. He noted that several banks have already deployed AI, while others are considering adoption.

The RBI Governor said the key question is whether banks deliberately shape their AI journey or allow the technology to develop by default.

Sanjay Malhotra also urged lenders to responsibly harness AI rather than treat it solely as a risk requiring containment. He said the central bank views AI as a capability that can deliver meaningful benefits when used responsibly.

According to Malhotra, AI can improve the economics of credit delivery. It can help lenders assess borrowers who lack formal credit histories and potentially bring more people into the formal banking system.

The RBI Governor said the technology could therefore make more Indians bankable and accelerate financial inclusion.

Malhotra stressed that AI should influence the wider way banks operate. Its adoption should extend beyond acquiring technology and completing isolated projects.

The RBI Governor described the conference theme as timely and appropriate, saying AI could define this decade of Indian banking as decisively as liberalisation shaped the 1990s and digitalisation transformed the 2010s.

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