RBI identified AI-enabled cyberattacks as the top near-term threat.
Cybersecurity awareness and employee training need strengthening.
RBI also flagged AI-led stock market gains as a source of financial fragility.
Artificial intelligence-enabled cyberattacks were classified as the "most important" near-term cyber threat for the Indian banking system by the RBI on Tuesday.
The RBI said it undertook a survey on the system's preparedness which revealed that financial institutions have established robust practices in cyber risk management, particularly vulnerability assessment and penetration testing of critical information systems.
"AI-enabled cyber attacks emerged as the most important near-term challenge," it said in the comments that come amid heightened commentary around the capabilities of systems like Mythos.
1 June 2026
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The RBI said Processes relating to regulatory reporting and board-level reporting of significant cyber incidents have also matured.
However, cybersecurity awareness and training for employees remain areas which require further strengthening.
Similarly, forensic preparedness also needs improvement to strengthen incident response capabilities, preserve digital evidence and facilitate regulatory and law enforcement investigations in the event of sophisticated cyberattacks.
In its bi-annual financial stability report, the central bank also classified the AI-led stock market boom in some countries as a potential source of "financial fragility".
Recent outperformance of some emerging markets has been largely driven by AI-linked companies rather than broad-based strength, the RBI said.
"Both remain sources of financial fragility as sell-offs in these firms could cause broader market declines in the US and cause spillovers to other markets through wealth effects," the RBI report said.
