Business

AI adoption is no longer optional: FM Sitharaman

By Sohail Khan 11 September 2026, 5:07 pm

Benchmarks
Nifty23,398.10-79.71

FEATURED FUNDS★★★★★

Motilal Oswal Midcap Fund Direct-Growth

5Y Return
21.93 %

Invest Now

Enter search text:

Business News›AI›AI Insights›GFF 2026: AI adoption is no longer a choice; responsible adoption is, says FM Sitharaman

Read Today's Paper

GFF 2026: AI adoption is no longer a choice; responsible adoption is, says FM Sitharaman
Synopsis

Finance Minister Nirmala Sitharaman stressed responsible AI adoption over avoidance. Institutions must manage AI risks and avoid legacy system reliance. Faster AI adoption requires safety and accountability, with human oversight remaining vital. Regulators and senior management must oversee AI deployment and potential harms.

Global Fintech Fest 2026 in Mumbai — Mumbai: Union Finance Minister Nirmala Sitharaman speaks during the Global Fintech Fest 2026, in Mumbai, Maharashtra.

Finance Minister Nirmala Sitharaman on Friday said institutions can no longer afford to frame artificial intelligence adoption as a choice between using the technology and avoiding it, arguing that the focus instead needs to be on deploying AI responsibly and managing the risks that come with it.

“The relevant choice is therefore not between adopting AI and avoiding AI. The real choice is between responsible adoption, well-managed adoption,” Sitharaman said in her valedictory address at the Global Fintech Fest 2026 in Mumbai.

She said institutions that continue to rely entirely on legacy systems risk becoming less capable, losing out to competitors or even fading out as AI reshapes businesses.

“Failing to adopt AI also carries risks,” she said.

Also Read: FM Nirmala Sitharaman calls India's demographic dividend an "active, unstoppable reality"

At the same time, Sitharaman stressed that faster AI adoption cannot come at the expense of safety and accountability. As AI moves from providing recommendations to taking direct actions, she said, the potential consequences of errors, fraud and misuse also become more significant.

“AI may assist judgment, but responsibility must remain human and institutional,” she said.

The finance minister said the more serious the consequences of an AI-assisted decision, the stronger the need for human review, explanation and an avenue for appeal.

She also called on regulators, boards and senior management to take greater responsibility for how AI is deployed, rather than leaving it entirely to technology teams.

“They must know where AI is being used, what decisions it influences, what data it relies upon, and what harm could arise if it fails,” Sitharaman said.

Higher-risk AI applications, she added, should face greater scrutiny both before deployment and throughout their lifecycle.

Sitharaman also flagged the need for coordination among financial regulators, competition authorities, data protection bodies and cybersecurity agencies as AI increasingly cuts across traditional sectoral boundaries.

Also Read: India’s banks could turn legacy tech into an AI advantage: BCG

“No activity should escape appropriate oversight merely because it sits at the boundary between sectors, or is delivered through a technology platform rather than a conventional financial institution,” she said.

Her comments come as financial institutions and fintech companies increasingly deploy AI and agentic AI for functions ranging from fraud detection and underwriting to customer service and operations.

Earlier in her address, Sitharaman described AI as a “double-edged sword”, saying it could help identify fraud faster while also enabling attackers to automate larger and more sophisticated cyberattacks.

She also warned that the speed of agentic AI could amplify systemic risks, as the technology moves beyond recommendations to taking actions directly.

“Agentic AI moves beyond giving recommendations to taking direct actions, compressing multi-day processes into seconds,” she said. But when decisions and transactions become instantaneous, software errors, fraud and market shocks can spread at the same pace, she added.

Add as a Reliable and Trusted News Source
Add Now!

Enter search text:

Continue reading with one of these options:
Limited Access
Free
Login to get access to some exclusive stories

& personalised newsletters
Login Now

Unlimited Access
Starting @ Rs120/month
Get access to exclusive stories, expert opinions &

in-depth stock reports
Subscribe Now

Unlock Access to All Exclusives with ETPrime FREE TRIAL

15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers

Trial offer expiring in00 : 05 : 00

I'd rather pay ₹2599 now

Uh-oh! This is an exclusive story available for selected readers only.

Worry not. You’re just a step away.

Prime Account Detected!

It seems like you're already an ETPrime member with

Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.

Unlock ETPrime's Exclusive Stories Today!

Subscribe to gain powerful insights on business, stock market and industry trends.

Big Price Drop! Flat 40% Off

Student Only Offer

Already a Member? Sign In now

Already a Member? Sign In now
Already a Member? Sign In now

Offer Exclusively For You

Save up to Rs. 700/-

ON ET PRIME MEMBERSHIP

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get Flat 40% Off

Then ₹ 1749 for 1 year

Avail Offer

Offer Exclusively For You

ET Prime at ₹ 49 for 1 month

Then ₹ 1749 for 1 year

Avail Offer

Special Offer

Get flat 40% off on ETPrime

Avail Offer
Avail Offer

Claim NowAlready a Member? Sign In now

Need Assistance?

Connect with an ETPrime expert for personalized support and guidance

+91 9484700004

' + h3 + '

' + h4 + '

' + listing + '

What’s Included with

ETPrime Membership

1Exclusive Insights That Matter

Uncover the truth with our investigative stories

Make strategic moves using the real-world case studies

Read industry-specific stories to identify emerging trends

Spot opportunities with in-depth insights that matter

Trump temper on H-1B visas is forcing Indians to do these things to stay put in US

What Adani’s US indictment means for India Inc’s overseas fundraising
Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.

Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?
Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?

The problem with lab grown diamonds
Why a falling rupee is a better option for the economy

A list of top 20 momentum stocks that have delivered massive returns in one year