📄 Abstract
Artificial intelligence is moving from a supporting technology to a decision infrastructure within banking. In India, this transition is especially significant because AI is being layered on top of a large digital public infrastructure that includes Aadhaar, Jan Dhan accounts, mobile connectivity, UPI, the Account Aggregator framework and emerging digital-credit rails. This paper examines how AI is transforming the Indian banking sector across customer service, onboarding, credit underwriting, fraud detection, anti-money-laundering controls, payments, collections, compliance, operations and managerial decision-making. The study uses a descriptive and analytical research design based on secondary evidence from Reserve Bank of India policy material, NPCI information, Indian data-protection law, international financial-stability guidance and recent peer-reviewed research. The central argument is that the most important effect of AI is not simple automation; it is the shift from transaction processing to continuous prediction, personalisation and risk sensing. At the same time, AI creates new forms of model risk, bias, opacity, cyber vulnerability, third-party dependence and accountability problems. Evidence from Indian banking research also indicates that customers value the speed and accessibility of AI-enabled services but continue to value human assistance for complex or high-stakes interactions, while employee adoption depends strongly on perceived usefulness, ease of use and managerial support. The paper proposes a responsible-AI model in which human accountability, explainability, privacy, model validation, auditability and continuous monitoring are embedded throughout the AI lifecycle. It concludes that India can derive substantial gains from AI in banking only when innovation is combined with institutional trust, strong data governance, inclusive design and proportionate regulatory safeguards.
🏷️ Keywords
📚 How to Cite:
Kanishka Yadav, Dr. Saurabh Singh , ROLE OF ARTIFICIAL INTELLIGENCE IN TRANSFORMING THE INDIAN BANKING SECTOR , Volume 12 , Issue 8, August 2026, EPRA International Journal of Multidisciplinary Research (IJMR) , Pages: 345 - 354 ,