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Informist, Thursday, Sept. 24, 2026

 

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--RBI Jain:Bks must compete on innovation, collaborate on security, resilience 
--RBI Jain: Must strive to harness tech for resilience, inclusion, trust 
--RBI Jain: Responsibility for tech governance must rest with board of banks 
--RBI Jain:Use of AI must be accompanied by human validation, accountability 
--RBI Jain:Even as tech becomes more advanced, human judgement stays critical 
--RBI Jain: AI can amplify errors as quickly as it amplifies efficiency 
--RBI Jain: Tech may be outsourced but not accountability 
--RBI Jain: Increase in digtial payments should not come at cost of trust 
--CONTEXT: RBI Deputy Governor Rohit Jain speaking at 13th SBI Conclave 
--RBI Jain: Tech increasingly shaping architecture of banking 
 

 

MUMBAI - Banks must treat technology as a core part of their risk architecture and ensure that rapid adoption of artificial intelligence is accompanied by strong governance, human oversight and accountability, Reserve Bank of India Deputy Governor Rohit Jain said Thursday. "Technology is increasingly shaping the very architecture of banking," Jain said at the SBI Banking and Economic Conclave in Mumbai. Technology investment should also be viewed as an investment in continuity, confidence and financial stability, he added.

 

The increasing scale of digital payments and financial services must not come at the expense of trust and resilience, while governance must precede the scaling up of artificial intelligence, he said. "Technology may be outsourced, but not the accountability," Jain said, stressing that banks remain responsible for understanding and managing risks arising from their dependence on external technology providers, including risks related to access controls, concentration, data protection and recoverability.

 

Jain said responsibility for technology governance must rest with bank boards and senior management, with clear ownership across business risk, compliance, operations and technology functions. Technology risk can no longer be treated as a back-office or purely technical concern managed exclusively by information technology departments, as technology is now embedded in critical banking functions ranging from payments and customer onboarding to credit assessment, fraud monitoring and regulatory reporting, he said.

 

Artificial intelligence can improve customer service, fraud detection, risk assessment and productivity, but can also amplify errors as quickly as it amplifies efficiency. "The use of AI must, therefore, be accompanied by appropriate validation, monitoring, human oversight and clear accountability," he said.

 

Human judgement would remain essential even as technology becomes more advanced, he said. "The road ahead requires ambition tempered with caution. We must innovate quickly, but not blindly; embrace AI and emerging technologies, but with accountability; and pursue interconnectedness, while ensuring that resilience is not compromised," he said.

 

Jain said India's digital financial infrastructure has expanded rapidly, with UPI processing 24.9 billion transactions worth around INR 30.15 trillion in August, or nearly 790 million transactions a day. Over the past decade, UPI transaction volume has increased nearly 13,000-fold, while platforms such as Account Aggregator and the Unified Lending Interface are also reshaping access to financial information and credit origination.

 

However, Jain said the scale of digital financial services also creates new responsibilities because technology failures can have consequences beyond individual institutions, affecting customers, counterparties and potentially the wider financial system. Third-party dependencies also need greater attention, while banks should regularly test recovery arrangements and operational resilience, he said.

 

Jain said cybersecurity can no longer be seen as simply protecting a bank's external perimeter, as threats increasingly combine technological vulnerabilities with human behaviour. Ransomware, compromised credentials, insider threats, social engineering, deepfakes, voice cloning and AI-enabled fraud are creating new vulnerabilities, he said.

 

"The attacker is therefore not always attempting to break through the strongest technical defence," Jain said, adding that attackers may instead seek to exploit the weakest identity, process, interface or human decision in a connected ecosystem. He said banks should move beyond identifying only suspicious transactions towards identifying suspicious patterns using real-time transaction monitoring, behavioural analytics, device and identity intelligence, domain and network analysis and information sharing. Jain also said the RBI is positive on tokenisation and is considering various use cases for the technology.

 

Jain said India's experience demonstrates that technology can expand access to financial services, reduce transaction costs and allow financial institutions to serve customers at a scale that would have been difficult through traditional channels. "Scale in digital payments and financial services must not come at the expense of trust and resilience," Jain said.

 

On foreign exchange reserves, Jain said RBI's management aims to provide external resilience to the country. "Safety, liquidity, return" are the key considerations in managing the country's foreign exchange reserves, he said. Jain also said the RBI is leaving the deployment of foreign currency non-resident (bank) deposits raised under the recent special hedging window to banks.

 

Jain said states are increasingly resorting to market borrowing to finance their fiscal deficits. The RBI has advised states to re-issue more bonds to help develop the secondary market for state government securities, he said.  End

 

Reported by Kabir Sharma, Nandini Sinha, and J. Navya Sruthi

Edited by Saji George Titus

 

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