New Delhi: Amid threats from the latest AI models, the government is exploring a centralised back office, for Regional Rural Banks (RRBs) to strengthen tech infrastructure and expand their digital services.
The National Bank for Agriculture and Rural Development may lead the initiative, focusing on shared digital platforms, analytics and enhanced cybersecurity capabilities, said people familiar with the developments.
"These discussions are part of the initiative to further strengthen RRBs and ensure that the tech infrastructure is secure," said an official, adding that the new structure will also look at common procurement operations and knowledge exchange with sponsor banks. All RRBs have state-run banks as their sponsor banks and hold up to a 35% share.
A bank executive said one of the key challenges for these 28 regional banks is cybersecurity and compliance. "Digital and technology transformation along with a collaborative approach are the two key agendas for RRBs," he said, adding that the government has directed bigger PSBs to play an active role on this front.
In April, finance minister Nirmala Sitharaman chaired a high-level meeting, along with minister for electronics and information technology Ashwini Vaishnaw, scheduled commercial banks and key stakeholders to assess the potential impact of emerging threats linked to recent developments in artificial intelligence (AI) models, particularly the possibility of such technologies being misused to weaponise software vulnerabilities.
RRBs have reported a consolidated net profit of ₹7,720 crore in the first nine months of FY26. The business growth for regional lenders increased to ₹12.35 lakh crore in FY25 from ₹11.29 lakh crore in FY24. Some RRBs, such as those in Uttar Pradesh and Andhra Pradesh, are already comparable in size to the smallest public sector banks.
An Enhanced Access and Service Excellence (EASE)-like framework for reforms for public sector banks is also being worked out for RRBs, the bank executive said.
Earlier this month, the finance ministry approved a revised Viability Plan 2.0 for RRBs till FY28, aimed at enhancing financial sustainability and their long-term competitiveness.
