SBI Chairman Highlights AI’s Role in Strengthening Risk Management, Efficiency, and Real-Time Surveillance in Financial Markets

State Bank of India (SBI) Chairman Challa Sreenivasulu Setty said on Wednesday that artificial intelligence (AI) has the potential to transform financial market infrastructure by strengthening risk management, improving operational efficiency, and enabling real-time market surveillance.

Speaking at an event marking 25 years of the Clearing Corporation of India (CCIL), Setty emphasized that AI can analyze vast datasets of historical transactions, counterparty behavior, and market conditions to enable dynamic risk management and more accurate prediction of counterparty exposures.

By analysing vast data sets of historical transactions, counterparty behaviour, and market conditions, AI can enable dynamic management, real-time risk assessment, and more accurate prediction of counterparty exposures.

C. S. Setty, Chairman, SBI

Setty added that AI and machine learning can automate repetitive processes such as clearing, settlement, and reconciliation, reducing operational overheads while improving speed and accuracy. This shift allows financial institutions to move from being post-trade processors to becoming pre-emptive risk sentinels that anticipate risks rather than merely managing them after they occur.

In many ways, this represents a shift from being a post-trade processor to becoming a pre-emptive risk sentinel—one that not only manages risk but anticipates it.

C. S. Setty, Chairman, SBI

The SBI chairman also highlighted the growing importance of AI in the context of India’s increasing prominence in the global financial landscape. He envisions deeper integration with international market infrastructures as new asset classes emerge and cross-border financial flows intensify.

He sees new asset classes emerging and cross-border flows intensifying. But, importantly, he feels “risks will develop in ways that are less visible, but potentially more systemic….

Business Today, April 22, 2026

Setty’s remarks align with recent comments from Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey, who in February 2026 acknowledged both the benefits and risks of AI in financial markets. Pandey noted that while AI aids in fraud detection, monitoring, and efficiency improvements, it also introduces challenges such as lack of transparency, algorithmic bias, and new types of market risks, underscoring the need for responsible adoption and strong oversight.

While AI helps in fraud detection, monitoring, and improving efficiency, it also brings challenges like lack of transparency, bias in algorithms, and new types of market risks.

Tuhin Kanta Pandey, Chairman, SEBI

Both leaders stressed that adopting AI responsibly is critical, requiring proper oversight, ethical standards, and robust risk management frameworks to ensure that the technology’s power is harnessed safely and effectively in India’s evolving financial ecosystem.

The discussions come amid broader governmental focus on the future of banking, including Finance Minister Nirmala Sitharaman’s proposal for a high-level committee to review the banking sector under the Viksit Bharat initiative, aiming to shape India’s financial landscape toward 2047.