Reserve Bank of India (RBI) governor Shaktikanta Das raises concerns over the growing use of Artificial Intelligence (AI).
According to Reuters, the RBI governor on Monday, October 14, 2024, said that the growing use of AI increases the risk of cyberattacks and data breaches which threatens the financial stability of the country.
Das at a conference organized by the central bank in New Delhi said, “The heavy reliance on AI can lead to concentration risks, especially when a small number of tech providers dominate the market. This could amplify systemic risks, as failures or disruptions in these systems may cascade across the entire financial sector,”
In a speech poster on the RBI website, he further added, “In the ultimate analysis, banks have to ride on the advantages of AI and Bigtech and not allow the latter to ride on them.”
RBI governor urged the banks and financial institutions to “strengthen their liquidity buffers” and to take adequate measures against AI’s opacity which makes it difficult to audit or interpret algorithms that drive decisions.
To note, RBI has introduced a 5% additional liquidity buffer for the digital buffer to mitigate the risk of quick withdrawal through internet and mobile banking.
