The governor of the Reserve Bank of India, Sanjay Malhotra, has called on the country's banks to use artificial intelligence to approve loans that human assessors would typically turn down, arguing this could significantly expand financial inclusion. Speaking at the FIBAC conference in Mumbai, he said AI models trained on alternative data could assess creditworthiness for first-time borrowers, gig workers and small businesses that lack formal financial records, extending access to banking well beyond what manual underwriting allows, and at a fraction of the cost.

Malhotra suggested AI could also help identify borrowers at risk of default early enough for banks to offer guidance rather than pursue recovery, and could support voice interfaces in India's many local languages to reach populations with lower literacy rates. He also flagged risks, notably the "black box problem" of opaque AI decision-making, which makes it hard for regulators, auditors and borrowers to understand why credit is refused, along with concerns about algorithmic bias and over-reliance on a small number of AI technology providers.