# AI biggest risk is erosion of human judgment: RBI Governor

2026-08-12T03:49:25+00:00 | Governance | Indian Opinion Desk

Corroboration: 1 independent outlet

RBI Governor Sanjay Malhotra warned on Tuesday that the biggest risk from deploying AI in banks is the erosion of human judgment and accountability. Speaking at FIBAC 2026 in Mumbai, he listed six key AI risks: explainability, bias, concentration, vendor dependence, data privacy and cyber vulnerabilities. Compliance with the DPDP Act alone is not enough, he said. Bank CEOs echoed concerns: PNB chief Ashok Chandra said AI agents in call centres must stay under human control, while SBI chairman CS Setty urged the next wave of AI-led banking to reach rural India and small businesses. Malhotra also compared AI’s potential in lending to UPI’s impact on payments, citing alternative data like GST filings to expand credit.

## Coverage

- thehindu.com <https://www.thehindu.com/business/main-risk-of-ai-is-erosion-of-human-judgment-rbi-governor/article71333254.ece>
- bfsi.economictimes.indiatimes.com <https://bfsi.economictimes.indiatimes.com/articles/banks-are-building-ai-agents-faster-than-they-are-solving-the-control-question-ceos-say/133163399>
- bfsi.economictimes.indiatimes.com <https://bfsi.economictimes.indiatimes.com/articles/rbi-governor-malhotra-says-dpdp-compliance-alone-not-enough-for-banks-identifies-six-ai-risks/133146289>
- timesofindia.indiatimes.com <https://timesofindia.indiatimes.com/business/india-business/next-wave-of-ai-led-banking-must-help-rural-india-says-setty/articleshow/133167862.cms>
- timesofindia.indiatimes.com <https://timesofindia.indiatimes.com/business/india-business/ai-can-do-to-lending-what-upi-did-to-payments-rbi-governor-sanjay-malhotra/articleshow/133167845.cms>

Tags: AI governance, banking regulation, FIBAC 2026, RBI, Sanjay Malhotra
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