Mumbai, Aug 11: Artificial intelligence (AI) could play a major role in expanding access to formal banking and credit in India by helping lenders reach customers who have traditionally remained outside the formal financial system, Reserve Bank of India Governor Sanjay Malhotra said.
Speaking at a banking and economics conclave in Mumbai, Malhotra highlighted the potential of AI to reshape the way banks assess credit, serve customers and manage risks.
He said the technology could help banks make more Indians “bankable” by enabling lenders to use a wider range of information while assessing borrowers. This could be particularly useful for small businesses, farmers, first-time borrowers and customers with limited conventional credit histories.
AI-based tools can help banks analyse information more efficiently, identify creditworthy customers and potentially make lending decisions faster. For customers, this could mean easier access to loans and more personalised financial services.
The technology also has the potential to strengthen fraud detection. By identifying unusual transaction patterns and suspicious activity, AI systems can help banks respond more quickly to emerging financial risks.
India’s expanding digital financial infrastructure provides a strong foundation for wider adoption of AI in banking. The combination of digital payments, online banking and data-driven financial services has already changed the way millions of Indians access and use banking services.
However, the growing use of AI will also require strong safeguards. Responsible use of customer data, cybersecurity, transparency and human oversight will remain important as banks increasingly rely on automated systems.
For the banking sector, AI offers an opportunity to improve efficiency while reaching a wider customer base. For consumers, its benefits could include faster services, better access to credit and stronger protection against financial fraud.
The wider adoption of AI could therefore help make India’s banking system more inclusive, efficient and customer-focused, while supporting the country’s broader economic and financial development.