RBI Deputy Governor T Rabi Sankar recently raised concerns about the dual nature of artificial intelligence (AI) at the Global Fintech Fest 2025, warning that while AI brings immense efficiency, innovation, and financial inclusion, it also carries unprecedented risks if left unchecked. Emphasizing the financial sector ’s reliance on trust, Sankar noted that even minor errors can have significant consequences, making careful oversight essential. He called for “safety by design” in AI deployment to prevent destabilization of markets, payment systems, and consumer confidence. The RBI has already implemented AI tools like MuleHunter.ai to combat fraud, highlighting the technology’s potential when managed responsibly.
RBI Deputy Governor highlights dual narrative of AI in finance
T Rabi Sankar stressed that AI systems must embed inherent safety checks, transparency, and accountability to avoid risks such as algorithmic bias, the “black box” problem, market volatility from AI-driven trading, and ethical issues like discriminatory profiling. He highlighted that AI should empower individuals, strengthen institutions, and enhance financial system resilience while preventing unintended consequences.
The RBI official outlined five pillars for integrating AI safely in finance: trust, ethics, training, technology for good, and togetherness. He emphasized the need for regulatory frameworks that encourage innovation without compromising systemic stability, ensuring AI benefits are harnessed without creating new threats.
AI and employment
Sankar also addressed concerns about AI-driven disruption in the job market, noting that historical parallels with transformative technologies suggest impacts on employment will vary, but caution and proactive planning are crucial to mitigate negative effects.
Official warnings and guidance from the RBI position responsible AI oversight as critical to safeguarding financial stability while fostering innovation in India’s rapidly expanding fintech ecosystem . Experts say embedding “safety by design” in AI systems is key to ensuring technology remains a force for good rather than a source of risk.
RBI Deputy Governor highlights dual narrative of AI in finance
T Rabi Sankar stressed that AI systems must embed inherent safety checks, transparency, and accountability to avoid risks such as algorithmic bias, the “black box” problem, market volatility from AI-driven trading, and ethical issues like discriminatory profiling. He highlighted that AI should empower individuals, strengthen institutions, and enhance financial system resilience while preventing unintended consequences.
The RBI official outlined five pillars for integrating AI safely in finance: trust, ethics, training, technology for good, and togetherness. He emphasized the need for regulatory frameworks that encourage innovation without compromising systemic stability, ensuring AI benefits are harnessed without creating new threats.
AI and employment
Sankar also addressed concerns about AI-driven disruption in the job market, noting that historical parallels with transformative technologies suggest impacts on employment will vary, but caution and proactive planning are crucial to mitigate negative effects.
Official warnings and guidance from the RBI position responsible AI oversight as critical to safeguarding financial stability while fostering innovation in India’s rapidly expanding fintech ecosystem . Experts say embedding “safety by design” in AI systems is key to ensuring technology remains a force for good rather than a source of risk.
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