FM Sitharaman Highlights Innovation Risks of AI, Advocates for Efficiency Without Compromising Stability
Finance Minister Nirmala Sitharaman addressed the Global Fintech Fest 2026, emphasizing the dual nature of artificial intelligence. She described it as a “double-edged sword,” capable of both detecting and perpetrating fraud. Sitharaman cautioned against the risks associated with AI, large language models, and cyber threats, noting their potential to influence societal opinions and electoral outcomes.
Regulation and Innovation
Sitharaman highlighted the need for regulation that balances innovation with risk management. She discussed the concept of “soft-touch regulation” with the Reserve Bank of India (RBI), aimed at fostering innovation without stifling it. The minister welcomed the RBI’s recent recognition of the Unified Fintech Forum as a self-regulatory organization under the SRO-FT framework, indicating the central bank’s responsiveness to the evolving fintech landscape. She also urged the RBI to advance its Central Bank Digital Currency (CBDC) pilot initiatives.
Youth and Economic Growth
Sitharaman praised India’s young population for driving innovation and economic growth. She dismissed skepticism regarding the country’s demographic dividend, asserting that young Indians are actively shaping the future. At the event, she remarked that the younger generation is “already writing tomorrow’s code” and building sustainable enterprises.
The minister noted the significant participation at the Global Fintech Festival, with around 8,000 organizations represented. Fintech firms accounted for 20% of participants, financial institutions for 25%, technology-related entities for 43%, and support services for 12%.
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