How RBI is helping banks combat digital payment fraud
What's the story
The Reserve Bank of India (RBI) has announced a new initiative to help banks combat digital payment fraud. At the FIBAC 2026 conference in Mumbai, RBI Governor Sanjay Malhotra said that the central bank will provide banks with a Digital Payment Intelligence Platform. The move comes as artificial intelligence (AI) and machine learning are becoming important in detecting fraudulent activities.
Technological intervention
AI critical in detecting frauds, says Malhotra
Malhotra stressed the importance of AI and machine learning models in identifying frauds.
He said, "AI and AI alone can check AI frauds," highlighting the potential of these technologies in combating digital payment fraud.
The RBI Governor also urged banks to evaluate their current state of AI adoption and establish appropriate governance structures around its use.
Vendor reliance
Concerns for smaller banks
Malhotra acknowledged that smaller banks may not have their own AI models and would have to rely on vendors.
He stressed the importance of data protection and governance in such cases.
The RBI Governor also emphasized that human judgment and accountability will continue to be crucial even as banks adopt more sophisticated AI models.
Governance emphasis
AI governance must be a priority for banks
Malhotra urged financial institutions to prioritize AI governance.
He suggested that banks should maintain a comprehensive inventory of the AI models they use, have a board-approved AI governance policy, and implement red-team and stress-testing capabilities.
This is all part of ensuring proper oversight in the use of advanced technologies such as AI in banking operations.