RBI Governor Sanjay Malhotra Says AI Success For Banks Depends On Accountability, Not Just Adoption

Banks that effectively use artificial intelligence in the coming years will not necessarily be those that adopt the technology most aggressively, but those that understand its applications and ensure accountability, Reserve Bank of India Governor Sanjay Malhotra said on Tuesday.

According to a report by PTI, Malhotra said AI adoption requires a fundamental change in the way financial institutions assess risks, serve customers, allocate capital and manage operations.

He was addressing the FIBAC 2026 conference. He said banking institutions need to rethink their approach towards technology adoption and decide whether they want to actively shape their AI strategy or allow it to evolve without direction.

AI can transform India’s financial ecosystem

Malhotra highlighted India’s advantage in deploying artificial intelligence due to the country’s advanced public digital infrastructure. He pointed to platforms such as Aadhaar, UPI, DigiLocker and ONDC as key foundations that can support private sector innovation.

The RBI Governor said initiatives such as the Unified Lending Interface and the Account Aggregator framework are examples of public digital infrastructure that can enable businesses to build AI-based solutions.

He said artificial intelligence has the potential to transform financial decision-making in the same way UPI changed digital payments.

According to Malhotra, previous technological developments mainly enhanced physical capabilities and connectivity, whereas AI has the ability to expand human intelligence. He noted that several tasks once considered highly complex, such as computer programming, are becoming more accessible as technology advances.

Banks need responsible AI frameworks

The RBI Governor stressed that successful AI implementation will require institutions to maintain clear ownership of outcomes. Banks will need to ensure that technology deployment is aligned with customer interests, risk management practices and regulatory expectations.

Malhotra also reviewed progress made on priorities discussed at the previous year’s conference, including financial stability, customer-focused banking, ease of doing business and reducing costs linked to financial intermediation.

He said several improvements have been made across these areas, while emphasising that technology-driven transformation will continue to shape the future of banking.

The RBI’s comments come as financial institutions globally increase investments in artificial intelligence for areas such as fraud detection, lending decisions, customer support and operational efficiency.