21% of surveyed banks, institutions implementing/developing AI: Eco Survey

There is a convergence in priorities among central banks as they adopt AI, which includes using AI to enhance decision-making, improve operational efficiency, and manage risks effectively, survey said

21 per cent of banks and financial institutions surveyed by the Reserve Bank of India (RBI) in the country are implementing or developing solutions based on artificial intelligence (AI), said the Economic Survey 2025-26.

 

Based on detailed surveys, the Economic Survey said, the RBI found that AI adoption in Indian finance is still in its early stages with adoption concentrated among larger banks, while smaller urban cooperative banks. 

 

Many non-bank finance companies (NBFCs), it said, face resource constraints, including inadequate data infrastructure, limited skilled talent, and insufficient IT budgets.  

 

 

“Additionally, even among early adopters, the use of AI applications remains basic, often focusing on improving process efficiency, customer interactions (such as simple chatbots), lead generation, and internal decision support, rather than engaging in complex autonomous decision-making,” the Economic Survey said.

 

Guiding principles

 

The RBI's framework, the survey said, recognises the importance of trust in mitigating systemic risks and preserving consumer confidence. For this, it has identified seven core guiding principles, the ‘Seven Sutras’, to ensure effective AI development, deployment, and governance within the financial sector. 

 

These include Trust; People First; Innovation over restraint; Fairness and equity; Accountability; Understandable by design; and Safety, resilience and sustainability. 

 

The World Economic Forum’s white paper on AI in Financial Services (January 2025), meanwhile, projects that investments across banking, insurance, capital markets and payments business will reach $97 billion by 2027, with AI making substantial contributions to revenue growth in the forthcoming years through enhanced operational efficiency, accuracy and a higher degree of personalisation at scale.

 

Global view

 

At the global level, there is a convergence in priorities among central banks as they adopt AI, which includes using AI to enhance decision-making, improve operational efficiency, and manage risks effectively, the Economic Survey said.

 

The European Central Bank (ECB), for instance, utilises AI to enhance statistics for monetary policy, supplement data with sources such as text and images using large language models, and for nowcasting and forecasting inflation, the survey said. It also developed early warning models to identify financial risks.

 

The Federal Reserve’s Federal Open Market Committee (FOMC), the Economic Survey said, has adopted AI for tasks such as writing, coding and research to enhance the analytical capabilities and gain insights into the broader implications of AI.

 

“The Bank of Canada has primarily adopted AI to forecast inflation, economic activity, and the demand for banknotes. It also tracks the sentiments in key sectors of the economy using sentiment analysis. The Bank of England has forecasted service inflation using a machine learning model, as well as to predict financial crises and bank distress,” the survey added.