Mumbai, Aug. 11 -- Artificial intelligence (AI), if deployed carelessly in the financial sector, could create new forms of exclusion and financial instability at a pace that regulators and banks may struggle to manage, Reserve Bank of India Governor Sanjay Malhotra said on Tuesday.

Speaking at the FIBAC 2026 Conference in Mumbai, Malhotra said India has a unique advantage because of its advanced public digital infrastructure, including Aadhaar, UPI, DigiLocker, ONDC, Account Aggregator and ULI.

He said AI built on top of this digital infrastructure has the potential to significantly change financial services and improve financial inclusion, but warned that the technology also carries risks if not deployed responsibly.

"AI, layered on t...