AI can do for lending what UPI did for payments: RBI governor

Artificial intelligence (AI) can fundamentally change the way credit is delivered by enabling lenders to assess borrowers using alternative data, in the manner how UPI has transformed payments, Reserve Bank governor Sanjay Malhotra has said.

AI could widen the credit net by using alternative data such as GST filings, cash flows and payment records to assess new-to-credit borrowers, he said. At the same time, he also called for greater caution in using AI, urging banks to treat AI adoption as a strategic, board-driven exercise rather than a collection of separate technology projects.