More Stories

Informist, Wednesday, Aug. 19, 2026

 

Please click here to read all liners published on this story

--RBI Murmu: Stress tests show banking system well placed to absorb shocks
--CONTEXT: RBI Deputy Governor Murmu's speech at CNBC-TV18 banking summit 
--RBI Murmu: Banking sector must scale across channels, forms of engagement 
--RBI Murmu: Bks' capacity must keep pace with transaction volumes, reach 
--RBI Murmu: Banks must upgrade tech, oversight with increasing scale 
--RBI Murmu: AI can help bks act on cyber risk before it becomes disruption 
--RBI Murmu on AI use: Bks need alternatives to intervene if systems fail
 

 

NEW DELHI – The Indian banking sector must continue to build on its strength to be able to support a larger and more complex economy, but as its reach, transaction volumes, and delivery arrangements expand, its capacity must keep pace, Reserve Bank of India Deputy Governor Shirish Chandra Murmu said Wednesday. Systems that perform well at today's volumes may behave quite differently at tomorrow's scale, and that calls for timely upgrades in technology, processes, and supervision, all of which innovation can help deliver, he said. 

 

"Banks should focus, in particular, on the functions critical to their resilience and on those that matter most directly to their customers," Murmu said at CNBC-TV18's Banking Transformation Summit in Mumbai. "Resilience, I would argue, should be built into the design of growth--not bolted on after the expansion has already happened."

 

According to Murmu, analytical intelligence, human intelligence, governance intelligence, and collective intelligence of the banking system will help the sector keep up with the capacity growth needed for a more capable financial system. "The value lies less in any one of these than in how well they are combined," he said.

 

Elaborating on analytical intelligence, Murmu said artificial intelligence must be used in a way that enables better pattern recognition to be able to reach more borrowers while also improving the customer experience. "AI can read not only structured indicators but audit observations, incident narratives, customer complaints, and system logs together, identifying connections that may not be visible to a single function--and so help a bank act on emerging weakness in fraud, conduct, operations, or cyber risk before it becomes a disruption," he said.

 

Having said that, as AI adoption increases, banks must retain judgement, capability, and alternative arrangements needed to intervene when systems fail or behave in ways that were not anticipated. "The ability to remain resilient in such circumstances is itself a critical organisational capability, form of intelligence--the ability to recognise, adapt, and respond when the unexpected occurs."

 

The deputy governor also sounded a caution against the interconnectedness of the financial system, which relies on the same data sources and models, as a single error or disruption can affect them all together. "The intelligence needed here cannot be assembled within any one institution--it has to be pooled," he said. This same logic must be applied to digital frauds, which move through multiple accounts, devices, and intermediaries at once, he added. "The question before us is how well, and how responsibly, we choose to use it (AI)."

 

At the outset, he also mentioned that India's banking system is well capitalised, with a capital-to-risk-weighted-assets ratio of 17.7% as of the end of March. Stress tests also suggest that the system is well-placed to absorb adverse shocks, Murmu said. The contribution of banking to growth should, however, not be measured only by the expansion of aggregate credit, or by the size of balance sheets, but by whom finance actually reaches, whether rising consumer expectations are met, and how banks support the wider economic activity. 

 

Murmu said that when banks scale up, they must also take into account consumer expectations, which are not uniform. They must scale across channels and across forms of engagement, catering to younger, digitally confident customers on the one hand and older customers on the other, who may value assisted access, personal interaction, and reassurance on security. The next phase of financial inclusion must also deepen digital inclusion while ensuring that those who need assistance, or other modes of access, are not left behind, he said.  End

 

Reported by Priyasmita Dutta

Edited by Rajeev Pai

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.