RBI Governor Warns Banks.. AI Decisions Must Have Human Accountability!

Reserve Bank of India Governor Sanjay Malhotra has called on banks to adopt Artificial Intelligence responsibly and maintain clear accountability for decisions involving AI systems. Speaking at FIBAC 2026, organised jointly by FICCI and the Indian Banks’ Association in Mumbai, he stressed that banks cannot shift responsibility to AI models, algorithms or technology vendors when something goes wrong.

Malhotra said AI should be used as a tool to support human intelligence rather than replace it. Banks should have strong human oversight systems capable of evaluating AI recommendations and intervening when necessary. He also said every bank should have a board-approved AI policy and remain accountable for outcomes even when AI services are sourced from third-party providers. At the same time, he highlighted AI’s potential in improving customer service, expanding credit access and detecting fraud, while warning banks about model bias, data privacy and cybersecurity risks.