Mumbai, Sept. 3 -- Reserve Bank of India Deputy Governor S C Murmu on Thursday called for greater use of artificial intelligence (AI) and machine learning (ML) tools by lenders to detect early signs of borrower stress, as credit growth gathers pace in the non-banking financial sector.

Addressing the 7th CII NBFC and HFC Summit, Murmu said lenders need rigorous stress testing, early warning systems and dynamic provisioning to manage asset-quality risks. He said AI and ML should be used more to identify signs of stress among borrowers.

"AI and machine learning tools should be used more to detect early signs of borrower stress," Murmu said.

The RBI Deputy Governor cautioned that faster credit growth could also increase risks to asset qual...