Loading...

⚠ ✕
❮ Top
☎ Help
Draft upto 3 replies to a
tax notice — FREE 🎉 ✕

150 credits · 30 days

• Basic Search → 1 Credit
• Advanced Search → 3 Credits
• Drafter → 20 to extract + 25 per issue
(≈ upto 2-3 drafts on us)

Already used our earlier 20-Credit Demo?
You are still eligible for this new 150-Credit Demo.

Activate your FREE Demo →
☰
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback✕

Contact Us At :

✉ E-mail: [email protected]

✆ Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters 0/2000
Make Most of Text Search ✕
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
╳
Add to...
You have not created any category. Kindly create one to bookmark this item!
✕
Create New Category
Hide
Title :
Description :
❮❮ Hide
❮ Default View
Expand ❯❯
Close ✕
🔎 Filters / Advanced Search ❯
TEXT

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In
Main Text + AI Text ❯
  • Main Text
  • Main Text + AI Text
  • AI Text
Category: ?
Categorized by AI
---- All Categories ---- ❯
  • ---- All Categories ----
  • Income Tax
  • GST
  • Customs, DGFT & SEZ
  • FEMA & RBI
  • Corp. Laws, SEBI & IBC
  • PMLA, Black Money & ED
  • Budget
  • News and Press Release
  • PTI News
Month:
---- All Months ---- ❯
  • ---- All Months ----
  • January
  • February
  • March
  • April
  • May
  • June
  • July
  • August
  • September
  • October
  • November
  • December
Year:
---- All Years ---- ❯
  • ---- All Years ----
  • 2026
  • 2025
  • 2024
  • 2023
  • 2022
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2014
  • 2013
  • 2012
  • 2011
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
Relevance Default Date
    Gross and Net GST revenue collections for the month of September, 2026
    Release of the Annual Survey of Industries (2024-25) results
    5th Kautilya Economic Conclave to be held in New Delhi from 3 to 5 October 2026 under the theme “Resilience in an Age of Flux”
    CCI approves the acquisition of certain equity share capital in IndiaFirst Life Insurance Co. Ltd. by BNP Paribas Cardif
    CCI approves acquisition of certain equity shareholding in Continuum Green Energy Ltd by Chubu Electric Power Company Netherlands B.V.
    CCI approves acquisition of majority of the shares and voting rights in Volkswagen subsidiary Everllence SE by funds managed and/or advised by Bain Ca...
    CCI approves acquisition of 100% shareholding of FMC India by Crystal Crop Protection Ltd
    Commerce and Industry Minister Shri Piyush Goyal Arrives in Milwaukee, U.S. to Attend G20 Trade Ministers’ Meeting
    Monthly Review of Accounts of Union Government of India upto the month of August 2026 (FY 2026-27)
    Union Minister of Commerce and Industry Shri Piyush Goyal to Visit the United States to Participate in G20 Trade Ministers’ Meeting
    14th India-UAE High Level Joint Task Force Meeting Held in Mumbai
    CBDT extends due date for furnishing Return of Income for AY 2026-27 in respect of persons subject to audit under the Income-tax Act, 1961
    DRI busts pan-India gold smuggling network and seizes around 6.6 kg of foreign-origin gold worth more than Rs. 10 crore; 11, including a mastermind, a...
    CBN conducts anti-drug awareness programme for students under Mission Yuva Raksha for Nasha Mukt Bharat in Jaora, Madhya Pradesh
    CBN Rajasthan Unit seizes nearly four tonnes of contrabands in intensified enforcement operations across Rajasthan
    Union Minister of Commerce and Industry Shri Piyush Goyal Highlights Uttar Pradesh’s Growing Global Trade and Investment Opportunities
    Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman will embark on an official visit to Qatar from 27 to 29 September 2026
    USIBC bats for early conclusion of India-US trade deal
    Banks advise customers to complete essential transactions ahead of 3-day strike
    Centre to borrow Rs 7.86 lakh cr in Oct-Mar, FY27 borrowing slashed by Rs 1.2 lakh cr
❮
❯
❯❯
Maximize Maximize Maximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

+

Are you sure you want to delete "My most important" ?

NOTE:

News
Showing Results for :
Reset Filters
Results Found:
Show All Summaries Hide All Summaries
October 1, 2026
Show AI Summary
GST revenue accounting distinguishes gross collections, refunds, net domestic and customs revenue, and SGST-IGST settlement reporting.
Gross GST revenue for September 2026 distinguishes domestic collections and IGST on imports; after domestic and ICEGATE refund adjustments, net revenue is calculated separately for domestic and customs GST. Cumulative collections through September similarly distinguish gross receipts, refunds and net revenue. SGST reporting compares pre-settlement receipts with post-settlement amounts that include the SGST portion of IGST settled to States and Union Territories. State and Union Territory revenue comparisons exclude GST on imported goods, while April-September domestic collections are split between Central and State formations.
October 1, 2026
Show AI Summary
Annual Survey of Industries results record broad manufacturing growth and define survey coverage, enumeration, digital data collection, and reliability limits.
ASI 2024-25 records broad-based growth in registered manufacturing, including establishments, output, Gross Value Added, employment, emoluments, fixed capital, invested capital, net income and net profit. The survey covers specified registered factories, bidi and cigar establishments, certain electricity undertakings, and qualifying large units in State-maintained business registers. Data are collected electronically under the statutory framework for collection of statistics using an establishment-based approach, with quality checks and caution required because the estimates arise from a sample survey.
October 1, 2026
Show AI Summary
Economic resilience policy dialogue examines financial stability, digital governance, trade fragmentation, and investment priorities amid global uncertainty.
The fifth Kautilya Economic Conclave will examine economic resilience amid global shocks through discussions on macroeconomic stability, monetary policy, financial stability, investment, fiscal federalism and capital-market development. Its agenda also covers digital economy governance, artificial intelligence, trade fragmentation, strategic autonomy, climate resilience, food systems, demographic change and global health security. Plenaries, parallel sessions and closed-door roundtables will consider policy responses and mobilisation of domestic and foreign capital for long-term investment.
September 30, 2026
Show AI Summary
Equity acquisition in a life insurer receives competition clearance for BNP Paribas Cardif's proposed investment.
Competition Commission of India approval covers a proposed combination under which BNP Paribas Cardif will acquire certain equity share capital in IndiaFirst Life Insurance Company Limited. The transaction is an acquisition of an ownership interest in an Indian life insurer. IndiaFirst Life Insurance Company Limited is incorporated in India, is an IRDAI-licensed insurer, and provides life insurance in India.
September 30, 2026
Show AI Summary
Merger control clearance permits Chubu's acquisition of equity in Continuum Green Energy through primary and secondary transactions.
Competition Commission of India approval covers the acquisition of certain equity shareholding in Continuum Green Energy Limited by Chubu Electric Power Company Netherlands B.V. The proposed combination comprises a primary subscription for, and secondary purchase of, the Target's equity shares from Continuum Green Energy Holdings Ltd., Singapore. The Target and its Indian subsidiaries primarily generate and sell renewable power from wind and solar sources.
September 30, 2026
Show AI Summary
Competition clearance authorises Bain Capital funds to acquire majority control of Everllence through a share transfer from Volkswagen.
Competition approval covers the indirect acquisition of a majority of the shares and voting rights in Everllence SE and its direct and indirect subsidiaries by funds managed or advised by Bain Capital Investors, LLC, from Volkswagen Aktiengesellschaft through a share transfer. Nikolaus (BC) Bidco GmbH acts as the purchaser and is a special purpose vehicle ultimately controlled by Bain Capital-managed or advised funds.
September 30, 2026
Show AI Summary
Full-shareholding acquisition in crop protection receives competition clearance, combining businesses spanning agrochemicals, seeds, and agricultural equipment.
Competition Commission of India approved Crystal Crop Protection Limited's acquisition of the entire, fully diluted shareholding of FMC India Private Limited from FMC Netherlands Holdings II B.V. and its affiliates. The approved combination comprises the acquisition of 100% of FMC India's shareholding by Crystal Crop. Crystal Crop is an Indian public limited company engaged in development, manufacture, and distribution of crop protection products, seeds, and agricultural equipment.
September 30, 2026
Show AI Summary
Investment facilitation supports cross-border manufacturing, technology, supply-chain, and business expansion partnerships between the two economies.
India-U.S. economic engagement extends beyond conventional trade to investment, manufacturing, technology, innovation, resilient supply chains, and high-value capabilities. Business engagement with manufacturing and technology companies addresses opportunities in India and expansion of partnerships. The Government of India indicates readiness to facilitate corporate operations, expansion, and investments in India.
September 30, 2026
Show AI Summary
Monthly fiscal accounts report receipts, tax devolution, and revenue and capital expenditure against budget estimates.
Monthly accounts up to August 2026 record total receipts of Rs.13,67,709 crore, comprising net tax revenue, non-tax revenue and non-debt capital receipts. Tax devolution to State Governments totals Rs.5,90,391 crore. Total expenditure is Rs.20,77,958 crore, divided between revenue expenditure of Rs.15,68,009 crore and capital expenditure of Rs.5,09,949 crore, with revenue expenditure including interest payments and major subsidies.
September 28, 2026
Show AI Summary
Rules-based multilateral trade engagement supports bilateral agreement negotiations, enterprise opportunities, investment partnerships, and developing-country policy space.
India's G20 trade engagement promotes a rules-based, open and non-discriminatory multilateral trading system while preserving policy space for developing countries. Bilateral discussions seek to expand opportunities for farmers, fishermen, women entrepreneurs, startups, MSMEs and other enterprises. India-United States engagement is intended to advance a balanced Bilateral Trade Agreement and an interim trade deal, alongside investment and industry outreach promoting manufacturing partnerships with Indian enterprises.
September 28, 2026
Show AI Summary
Cross-border investment facilitation under CEPA supports local-currency settlement, payment integration, joint projects and timely resolution of investor concerns.
Financial-sector cooperation covers local-currency settlement, integration of payment and messaging systems, and central-bank digital currencies, with steps to support timely implementation for more efficient, accessible and resilient bilateral trade and investment. The UAE-India Fast Track Mechanism remains available for addressing outstanding concerns affecting investments and companies in both jurisdictions, and the parties agreed to support timely resolution of such matters.
September 28, 2026
Show AI Summary
Return filing and tax audit deadlines are extended for the identified taxpayer category under the applicable statutory framework.
CBDT extends the Assessment Year 2026-27 Return of Income filing deadline for persons identified at serial no. 2 in the Table below Explanation 2 to section 139(1) of the Income-tax Act, 1961, from 31 October 2026 to 21 November 2026. The specified date for furnishing the audit report for the same class is extended from 30 September 2026 to 21 October 2026.
September 28, 2026
Show AI Summary
Courier-based gold smuggling enforcement targets concealed distribution through paper entities and foreign-origin gold consignments nationwide.
Coordinated customs enforcement targeted an organised gold-smuggling network that used courier consignments to distribute foreign-origin gold after cross-border entry. The operation led to seizure of 6.61 kg of gold bars under the Customs Act, 1962, and arrests of eleven associated persons. The network allegedly split gold into small consignments and used paper entities or persons without legitimate gold transactions to conceal distribution through courier channels.
September 28, 2026
Show AI Summary
Anti-drug awareness and cultivator outreach combine prevention, direct grievance redressal, and safeguards against illicit narcotics diversion.
Jan Sunwayi programmes provide direct, prompt and accessible grievance redressal for opium cultivators, including name corrections, Namantaran, and eligibility connected with the upcoming Settlement Operation. Cultivators are advised to avoid middlemen or intermediaries and seek clarification or assistance directly. These measures complement anti-drug awareness and preventive outreach aimed at preventing illegal trafficking, diversion and abuse of narcotic drugs and psychotropic substances.
September 28, 2026
Show AI Summary
NDPS enforcement targets concealed poppy straw, opium and cannabis trafficking through seizures, arrests, and continuing supply-chain investigation.
Narcotics enforcement operations in Rajasthan led to seizures of poppy straw, opium, hydroponic cannabis, cash, vehicles and a loaded country-made pistol, with four arrests. Poppy straw was recovered from vehicles and premises, including a truck where it was concealed beneath cement bags. Opium and cash were recovered from residential premises, while hydroponic cannabis concealed in an international parcel was recovered at the Foreign Post Office, Jaipur. The seized articles were taken under relevant provisions of the Narcotic Drugs and Psychotropic Substances Act, 1985, and supply-chain investigation continues.
September 28, 2026
Show AI Summary
Free trade agreement market access is positioned to expand export opportunities and international investment for local entrepreneurs.
Free Trade Agreement-led market access is positioned to expand international opportunities for entrepreneurs in Uttar Pradesh by supporting exports, investment inflows and access to overseas markets. International trade engagement is supported through direct business access to global markets, buyer-seller meetings and promotion of the State's products, cuisines and services. Export expansion, international investment, tourism and global recognition of State brands form the stated next phase of economic development, supported by coordination between governments and trade and industrial stakeholders.
September 28, 2026
Show AI Summary
Multilateral infrastructure cooperation guides annual development bank participation and bilateral engagement on sustainable investment and economic connectivity.
The official visit includes participation, as India's Governor, in the Annual Meeting of the Board of Governors of the Asian Infrastructure Investment Bank, alongside bilateral meetings and engagement with governmental leadership, business leaders and investors. The AIIB focuses on sustainable infrastructure and productive-sector investment in Asia to promote sustainable economic development, wealth creation and infrastructure connectivity.
September 25, 2026
Show AI Summary
Reciprocal trade agreement negotiations face tariff and subsidy pressures as both governments pursue lower bilateral trade barriers.
India-US bilateral trade negotiations seek completion of the first-phase Bilateral Trade Agreement through a reciprocal trade arrangement lowering trade barriers and tariffs. Further negotiations are required because of changed US tariff conditions, forced-labour tariffs on Indian goods, a possible investigation into excess industrial capacity and subsidies, and sanctions legislation relating to Russia. Ministerial and bilateral engagements will review progress on the proposed reciprocal arrangement.
September 25, 2026
Show AI Summary
Banking strike contingency measures direct customers toward advance transactions and digital channels as branch operations may be disrupted.
Banking-service continuity measures anticipate possible disruption from a three-day employee strike. Customers are advised to complete essential transactions in advance and use ATMs/ADWMs, mobile and internet banking, UPI, business correspondent points and other digital channels. Branch and office operations at participating institutions may be affected, while essential services are to be maintained where possible. Union demands include a five-day banking week, pension improvements and transition options from the National Pension System to the old pension scheme.
September 25, 2026
Show AI Summary
Government borrowing calendar: Reduced dated-securities borrowing will use weekly auctions, green bonds, switches and buyback operations.
Second-half dated-security borrowing will be completed through weekly auctions across maturities ranging from 3 years to 50 years, including Sovereign Green Bonds. Switching and buyback operations will continue to smooth the redemption profile, while a greenshoe option may permit retention of additional subscriptions. Treasury Bill borrowing will proceed through 91-day, 182-day and 364-day instruments. Auctions will offer non-competitive bidding for specified retail investors, and flexibility is retained to modify issuance terms or introduce non-standard maturity instruments, floating-rate bonds and inflation-indexed bonds.

News

Back

All News

Showing Results for :
Reset Filters
No Records Found

News

Back

All News

Winning in the AI Era: The New Playbook for Indian Banks - Inaugural Address by Shri Sanjay Malhotra, Governor, Reserve Bank of India at the FIBAC 2026 Conference, Mumbai, August 11, 2026

August 12, 2026

Contents
Summary
Note

Note

-

Bookmark

Print

Print

Distinguished dignitaries, bankers, captains of industry, friends from the technology sector, fintechs, policymakers, press, academia and colleagues from the RBI, good morning to all of you!

It is my pleasure to be back here at the 2026 edition of the FIBAC. It is an important annual conference that brings together the stalwarts of banking and industry to exchange ideas, foster innovation and strengthen collaboration. I congratulate both FICCI and IBA for putting together this event and thank the organisers for giving me the opportunity to share my thoughts today.

The theme of the conference – Artificial Intelligence - has been well chosen. It is apt and timely. It is a theme that, I believe, will define this decade of Indian banking as decisively as liberalisation defined the 1990s and digitalisation defined the 2010s.

I also like the use of the word "playbook". Artificial Intelligence is not a single technology to be procured, nor a project to be completed. It is a new way of doing business, of running a bank. It is a shift in how we evaluate risk, serve customers, price capital, and organise institutions. Many banks in this room are already deploying AI, and many more are considering it. The only question is whether you shape the AI journey with intent, or you let it shape you by default.

Building on FIBAC 2025

Before I turn to AI, let me briefly reconnect with something I shared at this very conference last year. At FIBAC 2025, I had spoken of three priorities that would guide our regulation-making going forward: strengthening financial stability, enhancing ease of doing business, and expanding bank credit while reducing the cost of intermediation.

On strengthening financial stability, we have taken a number of measures. We have finalised the standardised approach for credit risk capital, ECL framework, Effective Interest Rate (EIR) related changes in investment guidelines, prudential norms on project finance, related party transactions, dividends policy, guidelines on Net Open Position (NOP) among others. We are well on target to implement all applicable Basel III guidelines with effect from April 1, 2027 on a calibrated glide path. The regulatory architecture is further bolstered by our enhanced supervision, especially with regard to technology risk.

On enhancing ease of doing business too, we have made good progress. We have reduced regulatory burden on Boards, consolidated regulatory and supervisory instructions, streamlined forms of business, strengthened PRAVAAH, harmonised control and assurance functions, rationalised current-account and working-capital norms, delegated certain foreign exchange related approvals to ADs, etc.

On expanding bank credit, we have continued to strengthen the public digital rails like the Account Aggregator ecosystem and the Unified Lending Interface, that lower the cost of originating and underwriting credit, particularly for MSMEs and underserved borrowers. Rationalisation and updation of regulations related to PSL, project finance, Alternative Investment Funds (AIFs) and acquisition finance, among others, will enhance credit flow to deserving sectors.

Measures such as removal of Investment Fluctuation Reserve (IFR), revised norms on interest rate on deposits and rationalisation of DICGC premium, LCR and CRR shall reduce the cost of intermediation.

We will continue to work on these areas.

Why This Moment Matters

Let me now come to the theme of the conference – AI and start with why the Reserve Bank considers this a matter worthy of our attention.

Every major technological revolution has expanded the frontier of human capability. Steam multiplied muscle-power, electricity multiplied energy, computers multiplied calculation, and the internet multiplied connectivity. The AI wave goes deeper: it multiplies intelligence. AI extends the capability to make judgments at a scale and speed no human workforce could match. That is precisely its promise, and precisely its risk.

India today sits at a unique vantage point. We have the world's most advanced public digital infrastructure – Aadhaar, UPI, Digilocker, ONDC – and more like the Account Aggregator and ULI that are being built on the conviction that infrastructure should be a public good on which private innovation can flourish. AI, layered on top of this stack, has the potential to do for financial judgment what UPI did for financial transactions: make it instant, granular, and available to the last mile. AI, deployed well, can close existing gaps in financial inclusion faster than any preceding generation of technology. Deployed carelessly, it can also entrench new forms of exclusion and instability at a pace regulators and banks may struggle to keep up with.

The Reserve Bank's own Committee for the Framework for Responsible and Ethical Enablement of AI (FREE-AI), which submitted its report last year, put this tension nicely. Let me speak of this tension now.

The Case for AI in Indian Banking

I will be unambiguous: the Reserve Bank sees AI as a capability to be responsibly harnessed and not merely as a risk to be contained. There are at least five reasons why Indian banks cannot afford to sit on the sidelines.

First, AI changes the economics of credit delivery fundamentally. Traditional underwriting relies on financial history – precisely the data that is thin or absent for a new-to-credit borrower, a gig worker, or a small enterprise without formal books. AI models, trained on alternative data – cash flows, GST filings, utility payments, digital footprints – can extend the frontier of "bankable" India considerably further than manual underwriting ever could, at a fraction of the marginal cost per loan.

At the same time, AI-enhanced credit risk models, liquidity forecasting, and scenario analysis allow banks – and, indeed, us, as the regulator – to see emerging stress earlier than lagging financial statements permit.

Second, AI allows banks to serve customers better – provided it is used to augment rather than merely replace human judgment. A relationship manager assisted by an AI system that presents the right product, the right risk flag, can serve a higher number of customers more efficiently. AI-assisted grievance redressal, and personalised financial guidance can enhance service quality to customers.

Third, and perhaps most important for a country of our size and diversity, AI has the potential to be a profoundly inclusive technology. Voice interfaces in Indian languages can simplify banking by removing the language barrier. Predictive models can identify borrowers on the cusp of default early enough to counsel rather than merely recover. Used well, AI may be the most powerful accelerator to financial inclusion.

Fourth, it can enhance operational efficiency. There is scope to reduce cost to income ratios or intermediation costs in India. Effective adoption of AI can significantly improve the productivity of Indian banks across operations, sales and customer service, and credit and collections. Document processing, reconciliation, and internal audit sampling are all ripe for AI-assisted automation, freeing skilled staff for judgment-intensive work. It can automate transaction reporting, and regulatory return preparation, reducing both compliance cost and the operational risk of manual error.

Fifth, it is AI that can beat AI delivered fraud. Fraud today moves at the speed of an API call. A rules-based fraud engine, however well designed, is perpetually one step behind a fraudster who adapts more frequently. It is only machine-learning models which continuously learn from transaction patterns and can identify anomalies in real time rather than after the loss has crystallised.

This list is illustrative, not exhaustive, and I do not offer it as a mandate. Every bank's playbook should be its own – shaped by its customer base, its risk appetite, and its capacity to govern what it deploys.

But I would urge every bank present here, to ask themselves as to where it stands in AI adoption and how does it accelerate the adoption. You will need to invest in technology: IT infrastructure, talent, skilling and reskilling, forging sustainable partnerships and building governance structures. None of this happens overnight, and none of it happens by accident. It requires a deliberate, board-driven strategy, backed by sustained investment, and strong intent rather than a series of disconnected projects.

The Risks We Must Keep Firmly in View

I now turn to the second half of the playbook, which pertains to the risks.

The first risk is the "black box" problem. Many advanced AI models – particularly deep learning and generative systems – do not readily explain their own reasoning. When an AI system recommends against extending credit to a small business, both the borrower and the regulator are entitled to know why. Opacity is not merely an inconvenience; it strikes at the heart of accountability. It makes it exceedingly difficult for auditors, boards, and the Reserve Bank to be confident that a model is doing what it was designed to do.

The second risk is bias and exclusion. A model trained on historical lending data may, if left unchecked, learn and perpetuate existing biases – biases against certain geographies, certain occupations, certain communities. An algorithm that appears neutral on its face can produce deeply discriminatory outcomes in practice. Fairness in AI-driven finance is not a compliance checkbox; it is a design requirement from day one.

The third risk is concentration and herding. If a handful of foundation models, or a handful of technology vendors, come to underpin credit and trading decisions across much of the banking system, an error, a bias, or a vulnerability in that shared infrastructure ceases to be one bank's problem and becomes a systemic one. AI-driven trading models, if too similar across institutions, can synchronise behaviour in stressed markets and amplify volatility rather than dampen it – a risk this Reserve Bank watches with particular care.

The fourth risk is third-party and vendor dependence. Very few Indian banks, especially smaller ones, will build foundation models in-house. Most will consume AI capability through vendors and technology service providers. This is entirely understandable – but it does not mean that governance can stop at your own walls. Your outsourcing agreements must carry AI-specific accountability: the right to audit, the right to explanation, and a credible exit plan, should a vendor or model need to be replaced.

The fifth risk is data privacy and security. AI systems are hungry for data, and the temptation to feed them more than what is necessary, retain them longer than what is essential, or use them for purposes beyond what the customer consented to, will be constant. Compliance with the Digital Personal Data Protection Act is the floor, not the ceiling, of what customers should expect from their bank.

The sixth risk is cyber and adversarial vulnerability. AI systems can themselves be targets – through data poisoning, model manipulation, or adversarial inputs designed to fool a fraud detector into waving through a fraudulent transaction. As AI becomes more central to your defences, it also becomes a more attractive target for those seeking to defeat it.

And the seventh – perhaps the most important – is the erosion of human judgment and accountability. No matter how sophisticated the model, the responsibility for a bank's decisions rests with the bank, not with its algorithm. "The model decided" can never be an acceptable answer to a customer, an auditor, or the Reserve Bank. Meaningful human oversight – the ability to explain, to intervene, and, where necessary, to override – must remain a design principle, not an afterthought.

What We Expect, and What You Should Expect of Us

The Reserve Bank's approach to AI, articulated through the FREE-AI Committee's recommendations and draft guidelines on Model Risk Management resolves the tension between the promise and the risk of AI.

It rests on a simple philosophy: innovation and safety are not opposing goals; they are complementary requirements of a durable financial system. We have deliberately chosen a principles-based, proportionate approach over a rigid, prescriptive one, because AI capability and risk will look different for a large bank running proprietary models than for a small bank utilising a vendor's off-the-shelf product.

That said, certain expectations will apply across the board. I would urge every institution here to treat the following as immediate priorities rather than distant compliances:

  • Maintain a complete inventory of every AI system in use – including those embedded in vendor products – so that neither you nor we are ever surprised by what is running inside your institution.

  • Establish board-approved AI governance policies, with clear accountability for outcomes, not merely for technology procurement.

  • Build the capacity to explain AI-driven decisions that materially affect a customer, particularly in lending and fraud outcomes.

  • Red-team and stress-test AI systems before deployment and periodically thereafter, just as you would stress-test any other material risk.

  • Preserve meaningful human oversight at every point where an AI system's error could cause material harm to a customer or to financial stability.

We, in turn, are committed to engaging with the industry as this technology and its risks evolve through a willingness to learn alongside you rather than regulate from a distance; and to providing proportional, consultative, evidence-based and agile regulation making and supervision.

We also remain committed to providing the regulatory sandbox as a safe space for testing innovative use cases. We shall continue to facilitate and catalyse development of common utilities such as MuleHunter and the proposed Digital Payments Intelligence Platform to strengthen fraud detection and safeguard the system.

Concluding Thoughts

Let me now conclude.

We have much at stake –building further on the highly successful PMJDY; an MSME credit market, still underserved, estimated at the tens of lakhs of crore rupees, a retail credit culture that is only now maturing, customer service that can be vastly improved, intermediation costs that can be reduced further; and digital frauds that must be curbed.

We need to leverage AI for this. The banks that will win in the AI era will not necessarily be the ones that adopt the most AI, or the fastest. They will be the ones that adopt it with the deepest understanding of what they are deploying, the clearest accountability for its outcomes, and the strongest commitment to the customer's trust that has always been, and will remain, the true capital of Indian banking.

The role of the bank boards, the risk officers, the technologists, and yes, the regulator is critical in this regard. We all must work together, deliberately, and quickly for this purpose.

I look forward to this journey with you.

I wish the conference much success.

I also wish you all a happy Independence Day in advance.

Thank you.

Topics

Acts Income Tax