Mumbai
Reserve Bank of India (RBI) Governor Sanjay Malhotra on Tuesday said artificial intelligence (AI) could transform credit delivery, improve customer services and accelerate financial inclusion, potentially making more Indians eligible for formal banking services.
Speaking at the inaugural session of the FIBAC 2026 conference in Mumbai, Malhotra said AI could become a defining force for Indian banking during the current decade, much like economic liberalisation shaped the 1990s and digitalisation transformed the sector in the 2010s.
Malhotra stressed that banks should not treat AI as merely another technology project. Instead, he said it should be viewed as a new way of conducting banking operations, assessing risks, serving customers, pricing capital and organising institutions. He urged banks to make deliberate decisions about their AI strategies rather than allowing technology adoption to happen without clear direction.
The RBI Governor said many banks were already deploying AI, while several others were examining its potential applications.
Highlighting its potential for financial inclusion, Malhotra said AI could improve the economics of credit delivery by helping banks assess customers who do not have formal credit histories. Advanced technology could enable lenders to evaluate alternative information and make more informed lending decisions, potentially bringing underserved sections of society into the formal financial system.
He said the adoption of AI would require banks to balance innovation with responsible practices. As the technology increasingly influences lending and customer-facing decisions, financial institutions will need to ensure that its use remains reliable, transparent and aligned with the broader interests of customers and the banking system.
Malhotra’s remarks come as Indian banks increasingly explore AI for lending, customer service, fraud detection and operational efficiency.
