Mumbai: Banks must anticipate and contain cyber fraud and other emerging risks, while protecting consumers and preserving market integrity, Reserve Bank of India deputy governor Shirish Chandra Murmu said on Wednesday.
Speaking at the fourth CNBC-TV18 Banking Transformation Summit in Mumbai, Murmu urged lenders to "test these systems adversely before deployment, and again at regular intervals thereafter."
He said five principles should guide banking through the artificial intelligence era, including clear human accountability for automated decisions and an inventory of every AI system used by a bank, including those embedded in vendor products.
His comments follow RBI governor Sanjay Malhotra’s call for banks to adopt AI more deliberately. “The only question now before us is whether you shape the AI journey or you let it shape you by default,” Malhotra said, adding that AI would change how banks assess risk, serve customers, price capital and organise operations. He added that the private sector can use public digital infrastructure such as Aadhaar, UPI, DigiLocker and ONDC to support AI adoption.
Stress on accountability
"A machine may reach the decision, a person must own it," he said. "If a bank cannot say who that person is, it has not deployed a model; it has delegated its accountability." Every bank, he added, should maintain "a current inventory of every model and AI system in use, including those embedded in vendor products."
Murmu also said customers should know when they are interacting with an automated system, particularly when decisions materially affect them. A loan rejection, reduced credit limit or denied claim should have a route to a person with authority to review the decision, he said.
He cautioned banks against evaluating AI only through cost savings. "If AI compresses costs without widening reach or improving the customer's experience, we shall have automated the existing system rather than improved it," he said.
Citing credit bureau data, Murmu said the share of new businesses entering the formal credit system fell to 42% in 2025-26 from 52% in 2022-23, even as outstanding commercial credit grew 14%. He warned against treating "we don't know" as though it meant "we know it's bad", which could result in credit being denied unnecessarily.
Murmu also warned that common data, models, vendors and infrastructure could create risks across multiple institutions. "When risk becomes collective, the intelligence marshalled against it must become collective too," he said, pointing to MuleHunter.ai and the Digital Payments Intelligence Platform as the central bank's response.
