Kotak Bank CEO Expresses Concerns Over AI-Related Risks

Mumbai: Banks on High Alert as AI-Driven Cyber Threats Emerge

In a recent earnings conference, Kotak Mahindra Bank managing director and chief executive officer Ashok Vaswani sounded an alarm on the growing threat of AI-driven cyber attacks, which he believes are reshaping the banking sector's approach to cybersecurity.

Vaswani pointed out that the speed and scale of potential attacks are emerging as a key concern, as AI threats can evolve at the pace of a machine rather than a human. This shift requires banks to significantly upgrade their response capabilities, including identifying vulnerabilities faster and deploying fixes at scale.

The concern is also gaining traction at the policy level. Finance minister Nirmala Sitharaman recently asked banks to prioritize strengthening their cyber defenses, promptly reporting suspicious digital activity, and engaging top cybersecurity experts. Sitharaman chaired a high-level meeting with scheduled commercial banks and key stakeholders, emphasizing the need for a high degree of vigilance, preparedness, and stronger coordination across financial institutions.

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Kotak Mahindra Bank's net profit for the March quarter (Q4FY26) was ₹4,027 crore, up 13% on year and 17% on quarter. The bank's loan growth rose 16% on year to ₹4.96 trillion, while deposits grew 15% on year to ₹5.72 trillion.

However, Vaswani cautioned against complacency, stating that the ongoing crisis in West Asia has not yet materially affected the bank's books, though risks remain. The bank has stepped up monitoring across portfolios and is engaging with customers to assess contingency plans.

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Kotak Mahindra Bank's net interest margin stood at 4.67% at the end of March, up from 4.54% a quarter ago. The bank indicated that while deposit repricing has largely played out, net interest margins could soften gradually.