Indian Banks Asked To Embrace AI And Blockchain Revolution

Updated: 31 May 2023

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A top official representing India’s central bank has urged all banks to embrace artificial intelligence (AI) and blockchain technology. This will ensure sustainable growth and stability, according to the federal official.

At a conference organized by the Reserve Bank of India (RBI) for the directors of Indian banks, Deputy Governor Mahesh Kumar Jain discussed risk strategies around sustainable growth and stability.

Governance in Banks: Driving Sustainable Growth and Stability – Speech delivered by Shri M K Jain, Deputy Governor, Reserve Bank of India at the Conference of Directors of Banks organised by the RBI https://t.co/Ft4Kv68X0T

— ReserveBankOfIndia (@RBI) May 31, 2023

The Deputy Governor elaborated on the essential nature of robust corporate governance structures and processes. This is mainly in navigating the increasingly complex landscape of future risks. He noted technological disruptions, evolving customer demands, and burgeoning cybersecurity threats as sources of new and complex challenges for Indian banks.

However, Mr. Jain advocated for a strategic focus on technology adoption to overcome these uncertainties. In his advice for the future, he encouraged banks in India to “adopt innovative technologies such as AI and blockchain.”

Indian Banks Growing Interest

Nonetheless, Jain’s remarks come amid India’s incursion into digital currencies. On November 1, the country launched a central bank digital currency (CBDC), testing its offline functionality in early March. Notably, Ajay Kumar Choudhary, RBI’s executive director, shared India’s intention to utilize its CBDC as a common medium of exchange.

It is worth noting that this announcement reveals India’s growing interest in exploring the applications of AI and blockchain technologies in the banking sector. India’s neighbor Pakistan has also unveiled an ambitious plan to educate one million IT graduates in AI by 2027.

Significantly, Pakistan’s intended use cases for AI include predicting the weather, agriculture supply chain optimization, and health services transformation, among others.

Navigating the Crypto Space

However, the Deputy Governor’s recommendations for AI and blockchain adoption coincide with uncertainty concerning cryptocurrencies in India. India’s legislative body, the Lok Sabha, introduced the Cryptocurrency and Regulation of Official Digital Currency Bill in 2021. It aimed at preparing the groundwork for a digital currency issued by the RBI. However, this bill did not pass into law.

Concerns about standardization and dispute resolution have emerged amidst the country’s need for central authority regulating cryptocurrencies as a payment medium.

However, Jain’s call for the banks to invest in AI and blockchain technologies offers a vision of a future where these innovations drive sustainable growth and stability. As India navigates its path in the crypto space, it’s clear that AI and blockchain will play a vital role in shaping the future of India’s banking landscape.

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