Reserve Bank of India (RBI) Governor Sanjay Malhotra on Tuesday (August 11) said the central bank will provide banks with a Digital Payment Intelligence Platform to work with them on tackling fraud in the digital payments ecosystem.

Speaking at the FIBAC 2026 conference in Mumbai, Malhotra said the RBI would provide the platform to financial institutions as artificial intelligence (AI) and machine learning become important in identifying fraud.

“AI alone can use AI frauds,” Malhotra said, adding that AI and machine learning models would be needed to identify such frauds.

The Governor urged banks to assess where they stand in their adoption of AI and build appropriate governance structures around its use.

He said smaller banks may not have their own AI models and would therefore have to depend on vendors. This, he said, makes data protection and governance particularly important.

Malhotra also stressed that human judgement and accountability would remain important even as banks deploy increasingly sophisticated AI models.

“No matter how sophisticated model you build, for a bank decision, the ultimate decision has to be of bank and for that human oversight will remain important,” he said.

He urged financial institutions to treat AI governance as a priority. Banks should maintain a complete inventory of the AI models they use, have a board-approved AI governance policy and put in place red-team and stress-testing capabilities, he said.

RBI on banking reforms and credit

Malhotra said the RBI had made progress over the past year on customer centricity, ease of doing business and reducing the cost of intermediation.

He said the central bank had taken several regulatory steps to reduce the burden on bank boards, while leaving operational details to management.

The RBI has also strengthened its PRAVAAH platform, including automation of applications, he said. It has rationalised current account and working capital norms and addressed an industry request relating to the pricing of bulk deposits.

On credit growth, Malhotra said the RBI had taken several measures, including those relating to acquisition financing. Regulations covering priority sector lending, project finance and alternative investment funds have also been rationalised to improve credit flow to deserving sectors.

He said the banking sector was well on track to implementing Basel III guidelines from FY28, in line with the prescribed glide path.

Malhotra also highlighted the broader role of AI in banking and financial inclusion. He said India has advanced digital public infrastructure that can be leveraged for AI and that the RBI is working to improve and expand the Unified Lending Interface and Account Aggregator framework.

He cautioned that while AI can help close gaps in financial inclusion faster than other innovations, careless deployment could create new forms of exclusion.