India To Launch National Cybersecurity Plan

India is set to introduce a national cybersecurity strategy for the financial sector, with a focus on artificial intelligence (AI) and emerging technologies. The proposed framework aims to strengthen resilience against evolving cyber threats and bring clarity to the roles of regulators, financial institutions, and government agencies involved in cybersecurity management.

The initiative is being led by an inter-ministerial group, which has formed five specialized sub-groups to examine key areas, including regulatory concerns, third-party risks, and emerging technologies. The sub-groups are expected to submit their recommendations, which will include over 50 proposals, to the broader group before finalizing the strategy.

The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) already have cybersecurity guidelines for regulated entities. However, the proposed strategy aims to identify areas requiring a unified sector-wide approach, ensuring faster and more coordinated responses during cyber incidents affecting multiple stakeholders.

The increasing use of AI in financial services has added urgency to the initiative, with authorities concerned about emerging threats, including AI-powered fraud, deepfakes, and sophisticated cyber scams. In April, Finance Minister Nirmala Sitharaman discussed AI-related risks with bank executives, and the RBI directed banks to conduct board-approved assessments of AI-related risks and prepare time-bound action plans.

The government aims to address gaps in the current fragmented cyber governance structure by introducing common standards for reporting cyber incidents, minimum resilience requirements, and measures to manage risks arising from shared digital infrastructure and third-party service providers. The proposed strategy will play a crucial role in strengthening the cybersecurity framework of financial institutions and protecting against evolving cyber threats.

The initiative is expected to have a significant impact on the financial sector, with clear accountability and response mechanisms helping to prevent delays caused by overlapping responsibilities. With the increasing use of AI in financial services, the proposed strategy will help to identify and mitigate emerging threats, ensuring a safer and more secure financial system.