Archive · 3 Oct 2026
RBI Governor Warns India Against Complacency Amid Global Risks
India’s central bank governor said the country’s financial system is in a strong position.
But he warned that people should not assume things will always stay calm.
Countries have borrowed a lot, some investments may be overpriced, and financial risks are growing outside banks.
He also warned that advanced AI could create new cyber dangers.
India faces pressure from conflict in West Asia because it can raise the cost of important goods.
Malhotra said India has some protection from low inflation, strong growth and careful government finances.
He urged policymakers to prepare for shocks, share better information and protect more than just banks.
RBI Governor Sanjay Malhotra said India’s financial system is resilient but must remain alert to risks.
He highlighted global debt, stretched AI valuations, growing non-bank leverage, private credit and AI-driven cyber threats.
Malhotra said prolonged stability can encourage risk-taking, while simultaneous shocks could pressure the global financial system.
He cited India’s low inflation, strong growth and fiscal prudence as buffers against pressures including the West Asia conflict.
His policy priorities include stronger resilience, better scenario analysis and data sharing, and protection across the wider financial system.
- Who
- Reserve Bank of India Governor Sanjay Malhotra.
- What
- He warned against complacency and outlined risks to financial stability and priorities for improving resilience.
- When
- Saturday, at the 5th Kautilya Economic Conclave.
- Where
- New Delhi, India.
- Why
- Global debt, stretched AI valuations, non-bank leverage, private credit risks and AI-driven cyber threats could expose financial systems to shocks.
Risks and vulnerabilities
Resilience and safeguards
India’s financial stability
Risks and vulnerabilities
Malhotra warned that long periods of stability can encourage risk-taking and that new shocks could expose vulnerabilities.
Resilience and safeguards
He described India’s financial system as resilient and cited low inflation, strong growth and fiscal prudence as buffers.
Artificial intelligence and markets
Risks and vulnerabilities
A slowdown in AI investment or earnings could trigger sharp repricing, while advanced AI could increase cyber risks.
Resilience and safeguards
Malhotra said a correction in AI-related valuations in advanced markets could encourage capital inflows to India.
- Speaker
- Sanjay Malhotra, Reserve Bank of India governor
- Event
- 5th Kautilya Economic Conclave
- Key warning
- Prolonged stability can encourage risk-taking and leverage
- Global risks cited
- High debt, AI valuation risks, non-bank leverage, private credit and cyber threats
- India’s buffers
- Relatively low inflation, strong growth among major economies and fiscal consolidation
- India’s exposure
- The West Asia conflict could raise commodity prices and add external-sector pressure
- Policy priorities
- Build resilience, improve scenario analysis, strengthen data collection and sharing, and extend resilience across the financial system