Banking on AI: How Indian Banks Can Power Viksit Bharat 2047

India’s vision for Viksit Bharat 2047 is clear - to become a fully developed nation by the time it marks 100 years of independence. But this transformation will need more than infrastructure and innovation. It will need a banking system that is large enough to serve a growing economy, inclusive enough to reach every citizen, and resilient. Technology will play a key role in this shift, and AI is fast becoming central to that conversation.

Over the past decade, India has made great progress in financial inclusion. Nearly 90% of adults now have a bank account, up from less than 40% just ten years ago. Initiatives such as Aadhaar, CKYC, and Digi-Locker have simplified onboarding. The Unified Payments Interface (UPI) now handles over 700 million daily transactions. Additionally, frameworks like the Account Aggregator have enhanced the portability and customer control of financial data.

Despite the progress, significant gaps still remain. The largest Indian bank ranks 43rd globally by asset size. Only 40% of adults have accessed formal credit, and MSME credit penetration is just 14%. Where credit is available, it’s often more expensive than in developed markets. And with the rise in digital transactions has come a rise in financial crime. The challenge now is to close these gaps — without compromising trust or safety.

Banks have worked with data for decades, from credit scoring in the 1950s to fraud detection using neural networks in the 1990s. In recent years, deep learning has helped personalize services and sharpen risk management. A significant advancement occurred in 2016 with the introduction of transformer models and subsequently large language models such as GPT. These models are capable not only of analysing data, but also of generating new content, including text, speech, and documents.  Today’s AI agents go further, able to understand context, retrieve information, and carry out tasks, opening new possibilities for faster decisions, better service, and smarter operations.

AI as the Next Growth Lever for Banks

For Indian banks, AI is not just about efficiency — it is about reimagining scale, reach, and trust. AI can help banks reach people who’ve traditionally been outside the formal financial system, like small business owners, farmers, and gig workers, by using alternative data to assess creditworthiness. At the same time, it can make banking operations more efficient. From automating compliance and reducing fraud to helping developers write better code and generate reports, AI allows bankers to spend less time on routine tasks and more time on customer relationships.

With AI, banks can offer services that feel more local and intuitive. Chatbots that speak Indian languages and tools helps relationship managers prepare smarter and respond faster. 

By spotting patterns and anomalies early, banks can stay ahead of risks, which supports better decision-making and portfolio management, ultimately helping them build a stronger and more stable foundation for growth.

What Banks Must Do to Get AI Right

To turn AI promise into reality, banks will need more than pilots and experiments. Five strategic imperatives stand out:

• Build Modular AI Infrastructure: Develop reusable components — vision, speech, semantic search, translation, and coding assistants — that can plug into multiple banking journeys.

• Establish Responsible AI Governance: AI introduces its own risk. Careful vigilance and continuous monitoring are needed to keep hallucinations, bias, and cyber security risks in check.

• Leverage India’s Digital Public Infrastructure: Combine Aadhaar, UPI, Account Aggregators, and enriched credit bureau data with AI to build citizen-centric, interoperable solutions.

• Invest in Talent and Evangelization: Upskill bankers, coders, and data scientists; partner with academia and startups; and build internal AI communities to foster adoption.

• Drive Inclusive Innovation: Design AI to expand access, personalize offerings for underserved groups, and embed fairness into models.

Banking as India’s Engine of Progress

For India to become Viksit, our banks must do more than climb the global rankings. They need to lead in resilience, innovation, and problem-solving. Banks have a unique role to play in shaping growth.

This calls for placing technology, especially AI, at the heart of strategy. Not as a buzzword, but as a tool to solve real problems: expanding access to credit, improving customer service, and managing risk more intelligently.

But scale and speed aren’t enough. AI must be used with integrity, built on trust, and designed to include everyone, from urban entrepreneurs to rural gig workers. Done right, it will make banking more human and more responsive to the needs of a growing nation.

In that sense, banks will help lead India’s journey to 2047 and Viksit Bharat will become more than a goal. It will be something every citizen can experience.