• AI adoption is transforming operations across Indian banks
• AI is expanding financial inclusion through smarter credit scoring and services.
• AI is expected to drive major revenue growth in the banking sector.

Generative Artificial Intelligence (AI) could improve banking operations in India by as much as 46%, according to a recent report by the Reserve Bank of India (RBI). The central bank says that AI technologies are transforming how banks operate by increasing efficiency, lowering costs, and enhancing customer service.

The report highlights that AI adoption in Indian banking is rising quickly. Key reasons include the need to offer better customer experiences, improve employee productivity, ensure compliance, and develop innovative financial products. AI is already being used in areas such as credit scoring and chatbots, helping more people access banking services.

In particular, generative AI is helping banks understand customer behaviour, manage risk, and cut operational costs. AI powered credit models are also enabling financial access for those without traditional credit histories, using alternative data like utility bills, mobile usage, and online purchases.

The RBI noted that AI chatbots are improving customer service by quickly handling common queries 24/7, freeing up staff to focus on more complex issues.

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Looking ahead, AI is set to become a major source of revenue for the industry. The generative AI market in Indian banking is expected to cross ?1.02 lakh crore (around USD 12 billion) by 2033, growing at a rate of 28–34% per year.

The RBI concluded that with the right use of AI, banking in India can become more efficient, inclusive, and customer friendly, supporting strong growth for the entire financial sector.