India taps AI and digital rails to deepen financial inclusion push

MUMBAI: India’s financial inclusion story is getting a fresh AI upgrade, with digital platforms and artificial intelligence increasingly working hand in hand to bring more people into the formal financial system.

The country’s expanding Digital Public Infrastructure, or DPI, is now powering a new generation of AI-led financial services aimed at improving access to credit, payments and banking services, particularly for underserved groups.

The push combines old banking goals with new-age tech muscle. Or put simply, India is trying to turn “no credit history” into “no problem”.

At the heart of this transformation sits the JAM trinity comprising Jan Dhan accounts, Aadhaar and mobile connectivity. According to the government, Jan Dhan accounts have climbed to 58.16 crore as of April 2026, with deposits touching Rs 3.02 lakh crore. Aadhaar enrolments have crossed 144 crore, while mobile connectivity now covers almost the entire country, with 5G services available across 99.9 per cent of districts.

Digital payments continue to lead the charge. The Unified Payments Interface processed 2,264.11 crore transactions worth nearly Rs 29.53 lakh crore in March 2026 alone. The platform now accounts for around 81 per cent of India’s retail payment volumes, cementing its place as the backbone of the country’s digital payments ecosystem.

The government also pointed to the success of Direct Benefit Transfer, or DBT, which has transferred Rs 49.09 lakh crore directly into beneficiary accounts till January 2026. Officials said the system has helped save over Rs 4.31 lakh crore by removing duplicate and fake beneficiaries.

But the next phase is less about opening accounts and more about making those accounts smarter.

AI-powered lending models are increasingly being used to assess borrowers who may not have traditional credit histories. Instead of relying solely on conventional credit scores, these systems analyse alternative datasets such as GST filings, utility bills, bank transactions and digital payment behaviour.

The Unified Lending Interface, or ULI, is central to that effort. The platform allows lenders to securely access multiple verified data sources through standardised APIs, helping speed up loan approvals and improve risk assessment.

As of December 2025, 64 lenders, including 41 banks and 23 NBFCs, had joined the platform. The government said ULI is also being expanded to include Regional Rural Banks and District Central Co-operative Banks to improve rural credit access.

Alongside ULI, the Account Aggregator framework is enabling consent-based financial data sharing between institutions. More than 2.6 billion accounts are now enabled for data sharing within the ecosystem, with over 252.9 million users having linked accounts by the end of 2025.

Language accessibility is also getting an AI-led makeover. Earlier this year, the Digital India BHASHINI Division and the Reserve Bank of India signed an agreement to integrate multilingual AI models into banking systems.

The collaboration aims to develop a domain-specific “Banking BHASHINI” model capable of supporting financial services in all 22 scheduled Indian languages. The move is expected to reduce both literacy and language barriers in banking access.

Meanwhile, AI is also being deployed to tackle financial fraud. In December 2024, the Reserve Bank Innovation Hub launched MuleHunter.AI, a tool designed to detect suspicious “mule accounts” often used in cybercrime and money laundering. Unlike traditional rule-based monitoring systems, the platform uses machine learning models to flag abnormal transaction behaviour in real time.

The regulatory side is evolving too. The Reserve Bank of India continues to expand its Regulatory Sandbox framework, allowing fintech firms and banks to test emerging technologies in a controlled environment before wider rollout.

The government believes these combined efforts could significantly narrow India’s credit gap, especially for MSMEs, informal workers and first-time borrowers who have historically struggled to access formal finance.

Another ambitious initiative, Mission Digital ShramSetu, aims to use AI, blockchain and digital platforms to improve financial inclusion and skill visibility for nearly 490 million informal workers across the country.

Taken together, the message from policymakers is clear: India’s financial inclusion story is no longer just about banking the unbanked. It is now about building an intelligent, data-driven financial system that can personalise services, reduce friction and widen access without losing sight of security and trust.

As India pushes towards its Viksit Bharat 2047 vision, AI may well become the newest banker in the room, quietly working behind the screen while millions tap, swipe and borrow their way into the formal economy.