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Informist, Monday, Aug. 31, 2026

 

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--Fin min official: Indian fincl sector has promising use cases for AI 
--CONTEXT: Fin min additional secy Prusty speaks at PNB's AI Summit 2026 
--Fin min official: AI in fincl svcs to help become 3rd biggest econ by FY28 
--Fin min official: AI use to aid financial inclusion, regulation 
--Fin min official: AI to aid banks in credit delivery, improve underwriting 
--Fin min official: Need to develop sovereign AI ecosystem 
--Fin min official: Aim for deep tech R&D to get grant support, tax sops 
--Fin min official: Moot inter-regulatory sandbox to gauge AI risks 
--Fin min official: Moot inter-regulatory sandbox to gauge AI opportunities

 

NEW DELHI – Adoption of artifical intelligence in the banking system can help India become the third largest economy by the financial year 2027-28 (Apr-Mar), Debasish Prusty, additional secretary, department of financial services, said Monday. "Let me touch upon why we are talking about AI in the banking space. So much financial inclusion. I mean, without that, we cannot think of the country going to the third largest economy in 2027-28," he said at the Punjab National Bank's AI Summit 2026.

 

Prusty emphasised the need for India to develop a sovereign AI ecosystem within the country. "There is a need for developing a sovereign ecosystem within our country to offset any geopolitical challenges which we have been witnessing across our border and even farther from our borders," he said. 

 

He also stressed that India should focus on creating AI sandboxes to encourage experimentation while building skills among financial institutions. Moreover, India should focus on deep-tech-based research and development and incentivise it to grant support to tax holiday, easy patent and intellectual property registration, he added.

 

Prusty highlighted that India's financial sector has promising use cases for AI. "The latest advancements in AI and machine learning have resulted in more adaptive, responsive, and accurate models, leading to improved utility within the financial system," he said.

 

He, however, flagged that adoption of AI in India's banking sector is still in the early stages compared to competitive and global peers. He listed various segments, such as credit delivery and underwriting, where banks can use AI to increase productivity.

 

"AI changes the economics of credit delivery fundamentally," he said. "AI models trained on alternative data cash flows, GST filings, utility payments, digital footprints, can extend the frontiers of bankable India considerably further that manual underwriting ever put at a fraction of the marginal cost for the loan portfolio." 

 

AI can play a pivotal role in expanding financial access by enabling advanced credit scoring and voice-based banking in regional languages, he said, adding that these measures will facilitate greater participation from all sectors of the economy, including micro, small, and medium enterprises and rural households.  End

 

Reported by Aaryan Khanna

Written by Pratiksha

Edited by Rajeev Pai

 

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