RBI Governor: AI Can Approve Loans Humans Would Reject, Calls for Responsible Harnessing

Summary

RBI Governor Sanjay Malhotra has urged Indian banks to integrate AI into their lending processes, suggesting that AI trained on alternative data like cash flows and GST filings can extend credit to borrowers previously overlooked by traditional methods. He emphasized that while AI can enhance financial inclusion and strengthen the credit market, accountability for decisions must remain with human bankers, not algorithms.