AI is poised to reshape India's banking sector over the next decade, but its adoption must be guided by stronger governance, cybersecurity, and shared industry infrastructure to ensure responsible use.

AI could democratize access to credit for small businesses and agriculture by lowering operating costs for servicing smaller loans, helping reduce high interest rates as credit penetration grows.

Banks should extend governance and explainability practices from traditional predictive models to generative AI, aligning with responsible AI regulations and upskilling risk and analytics professionals.

Cyber risk demands an industry-wide overhaul with increased investments, shared utilities, and common infrastructure, rather than isolated efforts by individual banks.

To enable safe experimentation and rapid innovation, an AI governance framework should include a sandbox and a registry for third- and fourth-party vendors, with accreditation processes modeled on India's digital public infrastructure.

To unlock productivity gains, banks must redesign processes around AI for end-to-end transformation, maintaining strong controls and human accountability rather than merely automating individual tasks.