India’s banking regulator urges lenders to accelerate AI spend
“We have much at stake,” says central bank governor Sanjay Malhotra
Central bank governor Sanjay Malhotra emphasized the critical need for Indian lenders to swiftly embrace artificial intelligence (AI) by investing in technology, infrastructure, and worker training. However, Malhotra cautioned that the wider implementation of AI brings risks, such as biased or opaque decisions, data privacy concerns, and cybersecurity threats.
He also warned that reliance on a limited number of models or technology vendors could potentially leave the banking system vulnerable to errors. Malhotra emphasized that the banks that will thrive in the AI era are those that adopt the technology with a full understanding of what they are deploying. This statement underscores the growing challenge for India's financial sector, where banks are leveraging AI to improve efficiency while simultaneously exposing themselves to new vulnerabilities that could be exploited by cyber attackers.
Policymakers are responding by advocating for stronger safeguards, human oversight, and real-time sharing of threat intelligence. Malhotra highlighted additional risks, including geopolitical and trade uncertainties, and expressed confidence in India's banking sector's ability to withstand these challenges due to robust credit growth, low bad loans, healthy liquidity, and profitability. He concluded by noting that these factors bode well for the economy's recovery.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
