Mahesh Kumar Jain, Deputy Governor of the Reserve Bank of India (RBI), addressed the heads of public and private sector banks at the Conference organized by the Reserve Bank of India at the end of May in Mumbai and New Delhi. His speech touched on the need for Indian banks to embrace blockchain technologies and AI. He also discussed the challenges around the sustainable growth and stability of the Indian banking sector as well as the strategies to be adopted. Let’s decipher a few lines of these remarks.
Blockchain and AI at the service of 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, technological revolutions, changing customer demands and growing cybersecurity threats have brought to light unprecedented risks in technology, operations and business.
Faced with 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 recommends 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 the central bank digital currency on a pilot basis for the wholesale segment and the retail segment in November and December 2022 respectively. Later, in March 2023, it conducted a series of tests for the offline functionality of this currency.
As clarified by RBI Executive Director Ajay Kumar Choudhary, India is considering using its CBDC as a medium of exchange. These different actions helped to speed up the adoption process. Today, the 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 could facilitate the adoption of digital currency.
In sum, RBI Deputy Governor Mahesh Kumar Jain urges 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 to better face the challenges to come.
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