Mahesh Kumar Jain, Deputy Governor of the Reserve Bank of India (RBI), addressed heads of public and private sector banks at a Conference hosted by the Reserve Bank of India in late May in Mumbai and New Delhi. His speech touched on the need for Indian banks to embrace blockchain technology and AI. He also discussed the challenges surrounding the sustainable growth and stability of the Indian banking sector and the strategies to be implemented. Let’s break down a few lines from this statement.
Blockchain and AI to serve the Indian banking sector
India is determined to consolidate its position as a world leader in cryptocurrencies – a fact that is no secret. According to Jain, the technological revolution, changing customer demands and increasing cybersecurity threats have exposed unprecedented risks in technology, operations and business.
Facing these challenges, the Deputy Governor of the Reserve Bank of India (RBI) estimated that the country’s banking institutions need to integrate advanced technologies, such as artificial intelligence (AI) and blockchain, while focusing on digital transformation. He also recommended that they increase customer satisfaction and invest in enhanced cybersecurity measures.
RBI Digital Currency Launch: Where Are We Now?
In November 2022, the RBI launched its central bank digital currency as a test run for the wholesale and retail segments in November and December 2022 respectively. Then, in March 2023, the RBI conducted a series of tests for the offline functionality of these currencies. .
As clarified by RBI Executive Director Ajay Kumar Choudhary, India is considering using the CBDC as a medium of exchange. These actions help speed up the adoption process. Currently, RBI uses blockchain technology to transact with its digital currency.
It is therefore understandable that the adoption of innovative technologies such as AI and blockchain by Indian banks can facilitate the adoption of digital currencies.
In short, RBI Deputy Governor Mahesh Kumar Jain urged Indian banks to “prepare for the future” by embracing innovative technologies such as blockchain and artificial intelligence. He believes that this contribution will enable them to be more competitive and better face the upcoming challenges.
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