- Das raises pertinent concerns regarding the misuse of Artificial Intelligence (AI) in the banking sector.
- Warns that increasing reliance on AI could lead to heightened risks of cyberattacks and data breaches.
NEW DELHI: Reserve Bank Governor Shaktikanta Das said the critical need to enhance the efficiency of overseas remittances, particularly for developing economies like India.
Remittances serve as a vital financial lifeline for many households, facilitating economic stability and growth. Das articulated that leveraging new technologies and payment systems could significantly reduce both the time and cost associated with these transactions, thereby fostering greater financial inclusion and economic development.
Das highlighted the potential of cross-border peer-to-peer (P2P) payment systems as a starting point for enhancing remittance processes. By streamlining these transactions, emerging economies can unlock substantial economic benefits.
Increasing efficiency
He proposed exploring the feasibility of expanding real-time gross settlement (RTGS) systems to handle transactions in major currencies such as the dollar, euro, and pound.
The initiative, through bilateral or multilateral arrangements, could further enhance the efficiency of international payments and reduce the reliance on traditional banking systems that often incur high fees and lengthy processing times.
Additionally, Das pointed to the promise of Central Bank Digital Currencies (CBDCs) in facilitating efficient cross-border payments. The harmonisation of standards and interoperability among CBDCs is essential to ensure seamless transactions while addressing the financial stability risks posed by cryptocurrencies.
The approach could mitigate potential disruptions in the financial system and provide a secure framework for international exchanges.
However, Das also raised pertinent concerns regarding the misuse of Artificial Intelligence (AI) in the banking sector. He warned that the increasing reliance on AI could lead to heightened risks of cyberattacks and data breaches.
Therefore, it is imperative for banks and financial institutions to implement robust risk mitigation strategies to safeguard against these emerging threats. Das urged financial entities to harness the advantages of AI and Big Tech while maintaining control over their operations to prevent potential vulnerabilities.
