AI Tools Can Tame Money Laundering: RBI Guv

Mumbai: Reserve Bank Governor Sanjay Malhotra on Wednesday said that considering the evolving landscape of money laundering, regulators will need to continuously augment artificial intelligence (AI) and Machine Learning (ML) risk assessment framework to make appropriate system enhancements.

Addressing the Financial Action Task Force (FATF) Private Sector Collaborative Forum 2025 event here, the RBI Governor pointed out that technology has enabled greater ease of doing business, but at the same time, it has also facilitated and fostered new and very sophisticated means of money laundering and illicit financing. This makes it imperative to refine and improve risk assessment models.

He also urged the central banks to understand the latest trends and developments in the financial world that can be exploited by criminal elements. By understanding this, he said, central banks should develop rules and frameworks which detect suspicious transactions early, and take pre-emptive action.

At the same time, he also had a word of caution for policymakers. “While we continue to make our financial systems safe and secure against money laundering and terrorist financing, we as policymakers need to be mindful that our measures are not overzealous and do not stifle legitimate activities and investments,” Malhotra observed.