Vision for responsible AI adoption with strict human oversight
Reserve Bank of India Deputy Governor Shirish Chandra Murmu called on banks to implement responsible AI with strong human oversight at the Banking Transformation Summit on August 19, 2026. He urged institutions to maintain accountability and fair conduct while scaling technology.
Bridging the credit gap with alternative data
India's banking sector exhibits strong capital adequacy at 17.7 percent and gross non-performing assets at a low 1.8 percent.
The Financial Inclusion Index rose to 70.0 in March 2026, driven by increased system usage.
However, the share of new-to-credit borrowers in commercial lending fell from 52 percent in 2022-23 to 42 percent in 2025-26, despite overall commercial credit expanding by 14 percent.
Murmu highlighted that lenders must leverage artificial intelligence and alternative data—such as GST filings, cash flows, and utility payments—to reach underserved segments rather than merely automating existing relationships.
Algorithms can interpret unstructured data to evaluate borrowing capacity.
A human anchor for algorithmic decisions
While technology enables immense transaction scale—evidenced by over 24,000 crore UPI transactions worth ₹314 lakh crore in 2025-26—sustaining public trust requires strict governance.
Murmu warned against centralizing algorithmic risks and delegating institutional accountability to unmonitored models.
Banks must ensure that any material decision affecting a customer, such as loan rejections or limit reductions, includes a clear pathway to a human authority capable of reviewing and reversing the outcome.
Technology cannot replace accountability
The RBI correctly identifies that unchecked AI adoption risks deepening credit exclusion.
Requiring human appeal channels for automated rejections provides an essential consumer protection layer.
Yet, ensuring real human authority over complex algorithms remains a formidable operational hurdle.