Archive · 25 Sep 2026
RBI Deputy Governor Urges AI Governance Before Financial Services Scale
RBI Deputy Governor Jain said banks should set rules for artificial intelligence before using it on a much larger scale.
He said technology helps banks, but it can also create serious risks.
A computer outage or cyberattack could stop people from using important financial services.
Data breaches can lead to identity theft, fraud and reduced trust.
Banks should update systems, protect data and prepare responses to incidents.
They should also look for unusual behavior and patterns, not just suspicious transactions.
Jain said AI can help attackers, but it can also help defend banks.
He expects banks to use new foreign-deposit liquidity in the coming months, while managing India’s reserves carefully.
RBI Deputy Governor Jain said AI governance must come before expanding AI use in financial services.
He said technology investment should also be treated as investment in continuity, confidence and financial stability.
Jain warned that cyber incidents, system outages and technology failures can prevent customers from accessing essential financial services.
He urged banks to strengthen vulnerability management, data protection, patching, incident response and broader cyber-monitoring systems.
Jain expects banks to deploy FCNR (B) deposit liquidity over coming months, while forex reserves remain governed by safety, liquidity and return priorities.
- Who
- RBI Deputy Governor Jain, banks and financial institutions.
- What
- Jain called for AI governance before scaling AI and discussed technology resilience, cybersecurity, FCNR (B) liquidity and foreign-exchange reserve management.
- When
- Thursday; India’s foreign-exchange reserves were reported at $780.78 billion as of September 11.
- Where
- At the SBI Banking & Economics Conclave and in comments to reporters on its sidelines.
- Why
- To ensure that expanding digital financial services does not undermine trust, resilience, cybersecurity or responsible reserve management.
- Speaker
- RBI Deputy Governor Jain
- Main message
- AI governance should precede scaling in financial services.
- Cybersecurity approach
- Banks should combine real-time transaction monitoring, behavioral analytics, device and identity intelligence, domain and network analysis, and information sharing.
- FCNR (B) liquidity
- Jain expects banks to deploy the liquidity over the coming months, depending on their pipelines, proposals and liquidity outlooks.
- Reserve priorities
- Foreign-exchange reserves should be managed in the order of safety, liquidity and return.
- Foreign-exchange reserves
- India’s reserves stood at $780.78 billion as of September 11.
- Technology risk
- Technology risk extends beyond IT because it is embedded in functions including customer onboarding and fraud detection.