NEW DELHI, Oct. 3 -- India's financial system is "very resilient", but prolonged stability can encourage risk-taking and leave the system vulnerable to a new generation of shocks, Reserve Bank of India governor Sanjay Malhotra said Saturday, flagging risks from high global debt, stretched artificial-intelligence valuations, leverage outside banks and artificial intelligence (AI)-driven cyber threats.

"It's not that I see any imminent signs of stress, but it is because we need to remind ourselves that we need to remain alert to these risks," Malhotra said at the 5th Kautilya Economic Conclave in New Delhi.

The world has weathered repeated shocks since the 2020 pandemic, while India has enjoyed a long period of stability, backed by strong...