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Informist, Friday, Sept. 11, 2026

 

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--Sitharaman: India experiencing demographic dividend in real time
--CONTEXT: Finance Minister Sitharaman speaking at Global Fintech Fest
--Sitharaman: New generation not waiting for legacy yardsticks
--Sitharaman: Institutions must look for ways to guard public from AI risks
--Sitharaman: Indian technology cos must navigate cross-border regulations
--Sitharaman: Fintechs must not diminish collective freedom as they scale
--Sitharaman: Fintechs must moot federated structure to govern sector
--Sitharaman: Federated fintech structure can help cos engage with intl cos
--Sitharaman: Tech cos need to be fair to jurisdictions they earn in
--Sitharaman: Federated fintech structure can help cos identify profit mkts
--Sitharaman:Urge RBI to advance, develop wholesale, retail CBDC pilot
--Sitharaman: Tokenisation growth shows synergy between RBI, SEBI
--Sitharaman:Federated fintech structure can moot norms before regulator does
--Sitharaman: AI acts as double edged sword
--Sitharaman: AI acts as double-edged sword, helps catch and create frauds
--Sitharaman: AI allows attackers to do larger, more sophisticated attacks
--Sitharaman: Goal is to not let speed of AI compromise safety
--Sitharaman: Must build guardrails to ensure AI safety with speed
--Sitharaman: Efficiency, safety should not be competing objectives
--Sitharaman:Responsibility of AI decisions must remain human, institutional
--Sitharaman on AI governance:Responsibility must stay with human, regulators
--Sitharaman: Regulators must know consequences of each AI use case
--Sitharaman: Boards of cos cannot leave AI decisions to tech teams
--Sitharaman: Institutions must understand where AI creates value, risks
--Sitharaman: Institutions must have ways to combat risks from AI in use
--Sitharaman:Innovation must expand efficiency without bringing systemic risk

 

MUMBAI – Finance Minister Nirmala Sitharaman Friday called on financial technology companies and the broader technology ecosystem to consider building a federated industry platform that can develop standards and engage regulators before formal regulatory positions are framed, saying collective self-governance could help the rapidly evolving sector preserve its freedom to innovate while addressing emerging risks.

 

Speaking at the Global Fintech Fest 2026 in Mumbai, Sitharaman said fintech companies should develop a federated structure that could give the industry a credible collective voice, particularly as Indian technology companies expand overseas and face differing rules on data, licensing, cybersecurity, consumer protection, taxation, and financial regulation.

 

"Where the regulator's writ ends, your own standards must begin," the finance minister said, stressing that the principle of self-regulation should extend to fintech and technology companies operating beyond the traditional regulated perimeter.

 

She said such a platform could engage foreign governments and regulators before regulatory positions harden, identify areas where standards can remain interoperable, share best practices on data and cybersecurity, and help companies understand different licensing environments.

 

It could also represent Indian industry in discussions on international rules governing emerging technologies, while helping Indian companies to commercialise and monetise intellectual property across jurisdictions, build partnerships abroad, and enter new markets, she said. Sitharaman said the structure could also help fintech and technology companies identify markets where their products can be commercialised and engage with large international companies and institutional partners that can share best practices and open new markets.

 

However, she cautioned that collective engagement should not diminish the entrepreneurial freedom that has allowed the technology sector to develop. "As your companies become larger and more international, collective engagement need not diminish that freedom," she said, adding that it could instead "help protect the space in which that freedom operates".

 

Sitharaman said Indian technology companies seeking to become global must treat navigating cross-border regulation as part of their growth strategy rather than as a peripheral issue. "Technology can move across these boundaries almost instantaneously. That creates a particular challenge for this industry as a whole," she said.

 

She also said technology companies have a responsibility towards the jurisdictions where they generate profits, including to treat customers fairly, meet applicable tax obligations, and contribute to the societies in which they operate.

 

A major part of Sitharaman's speech focused on the risks posed by artificial intelligence, with the minister warning that institutions must develop safeguards quickly enough to keep pace with the speed of AI adoption. She said AI is a "double-edged sword" capable of helping institutions detect fraud faster while simultaneously enabling attackers to automate larger and more sophisticated cyberattacks.

 

Sitharaman said institutions must look for ways to protect the public from AI-related risks and must understand where AI creates value, where it creates material risk, and what safeguards are required for each use case. "Regulators, boards, and senior management cannot treat AI as a matter to be left entirely to the technology teams alone," she said. Boards and managements must know where AI is being deployed, what decisions it influences, what data it relies upon, and what harms could arise if it fails.

 

Sitharaman also emphasised that responsibility for decisions involving AI must remain with humans and institutions. "AI may assist judgment, but responsibility must remain human and institutional," she said, adding that the more serious the consequences of a decision, the stronger should be the requirements for review, explanation, and appeal.

 

She said financial regulators, competition authorities, data protection authorities, and cybersecurity agencies need a clear understanding of their respective responsibilities and a reliable mechanism for coordination. "No activity should escape appropriate oversight merely because it sits at the boundary between sectors or is delivered through a technology platform rather than a conventional financial institution," she said. 

 

Sitharaman said the central policy challenge is to ensure that technological efficiency does not come at the cost of systemic safety. "How do we balance breakthrough efficiency against emerging systemic risk?" she said, noting that tokenisation can make asset transfers almost instantaneous, agentic AI can compress multi-day processes into seconds, and quantum computing could fundamentally alter computing power and security protocols.

 

She called for guardrails that allow AI and other technologies to move quickly while maintaining accountability, human oversight, and the ability to reverse mistakes. "Our goal should be neither to block innovation out of fear nor to let speed compromise safety," she said, adding that institutions must distinguish between wasteful operational friction and essential safeguards.

 

She said built-in checks, human supervision, and circuit breakers would be essential as technology becomes increasingly autonomous. Sitharaman also warned that the increasing capabilities of AI could allow attackers to conduct larger and more sophisticated attacks, while recent developments globally demonstrated that autonomous cyber capabilities could advance faster than the controls designed to contain them.

 

Sitharaman highlighted India's progress on tokenisation, pointing to REC Ltd.'s first tokenised corporate bond pilot in the SEBI regulatory sandbox. She said the bond and the digital rupee moved at the same instant, allowing the transaction to close when payment was made. The development demonstrated the "synergy" between the Reserve Bank of India and the Securities and Exchange Board of India, she said.

 

She urged the RBI to further advance and develop its wholesale as well as retail central bank digital currency pilots, saying it needs to continue sharpening its capabilities with the digital rupee as tokenisation, agentic AI, and quantum computing develop.

 

Sitharaman said the RBI's recognition of the Unified Fintech Forum as a self-regulatory organisation for the sector under its framework was an important development. She said the central bank has to respond to the sector in time without affecting its innovative threshold and referred to the importance of RBI and SEBI working together.

 

Sitharaman also said India's demographic dividend was being experienced "in real time", pointing to the young talent and entrepreneurs participating in the fintech ecosystem. She said the new generation was not waiting for legacy benchmarks to validate its productivity but was already building enterprises and platforms.  End

 

Reported by Kabir Sharma, Priyasmita Dutta, Sagar Sen, and J. Navya Sruthi

Edited by Rajeev Pai

 

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