Finance Minister Nirmala Sitharaman Urges Indian Banks to Counter AI-Driven Cyber Threats

Union Finance Minister Nirmala Sitharaman said Indian banks must adopt a more versatile and proactive approach to counter emerging artificial intelligence-driven cyber threats. Speaking at a press conference in Pune following the launch of a new State Bank of India office, she emphasized that current security measures, while effective in the past, may not suffice against advanced AI models.

Her remarks followed a high-level meeting on Thursday with Union Minister for Electronics and Information Technology Ashwini Vaishnaw, along with representatives from the RBI, NPCI, CERT-In, and chiefs of Scheduled Commercial Banks. The meeting was convened to assess risks from AI models that could be misused to weaponize software vulnerabilities.

Sitharaman noted that Indian banks have remained largely free of major cyber security incidents over the decades due to sustained digitization, regular system upgrades, and firewalls. "This has been an ongoing exercise and Indian banks have done very well for themselves that there has not been a major incident over the decades," she said. However, she cautioned that the challenge from advanced AI is different and less understood. "We need something new and something far more versatile to counter the newer threats which are likely to come," she added.

Banks have been directed to work together under a coordinated institutional mechanism led by the Indian Banks' Association (IBA). The SBI Chairman, in his capacity as IBA head, will lead the effort. In the coming weeks, banks will assess investment needs, technology adoption, and the use of AI to counter AI-based threats. Sitharaman clarified that this is an IBA-led process to identify vulnerabilities and review vendor dependencies rather than the formation of a new committee.

She urged banks to engage top-tier cybersecurity professionals and specialized agencies to strengthen defensive capabilities and to report suspicious activity to CERT-In immediately. A robust real-time threat intelligence sharing mechanism was also advised.

On the geopolitical front, Sitharaman acknowledged the impact of the West Asia crisis, particularly the closure of the Strait of Hormuz, which has pushed crude oil prices higher. "Because of the Strait of Hormuz crisis, we'll see what best we can do. These are constantly moving challenges," she said.