Indian banks should harness AI to improve internal controls and address customer complaints more effectively, according to central bank governor Sanjay Malhotra.

Malhotra highlighted concerns over rising complaints about mis-selling and aggressive banking practices, warning that the issue could escalate if left unchecked. In the 2023-2024 financial year, 95 commercial banks in India received over 10 million complaints from customers.

AI-powered solutions can help financial institutions analyse large data sets to detect issues such as ATM failures and erroneous charges before they become widespread.

Malhotra also pointed to the potential of AI-driven chatbots and voice recognition tools to assist customers in multiple languages, making banking services more accessible in India's linguistically diverse market.

Alongside AI adoption, Malhotra urged banks to invest in human capital to enhance customer service and grievance redressal processes.

Strengthening both technology and human resources will be crucial in ensuring financial institutions can meet the needs of a rapidly growing customer base while maintaining trust and transparency.