Former Bureaucrat urges RBI to build joint cyber defence against AI-powered attacks
Babushahi Bureau
Chandigarh, October 26, 2026: Former Punjab Special Chief Secretary KBS Sidhu has urged the Reserve Bank of India (RBI) to lead a coordinated, multi-agency cybersecurity framework to protect India’s financial system against artificial intelligence (AI)-assisted hackers and hostile state actors.
In a letter to RBI Governor Sanjay Malhotra, Sidhu proposed coordinated cyber defence measures involving financial regulators and market institutions, warning that disruptions to critical payment networks could affect salaries, pension payments, agricultural transactions and fuel purchases.
Sidhu welcomed the RBI’s new data centre and Enterprise Computing and Cybersecurity Training Institute at Info Valley-II in Jatni, near Bhubaneswar. Inaugurated by Prime Minister Narendra Modi on October 25, the 18.55-acre campus should serve as the beginning of a sustained cybersecurity effort, he said.
Five measures proposed to strengthen cyber defence
Sidhu outlined five recommendations for the RBI:
- Live failover drills: Periodically transfer critical operations from the RBI’s primary data centre at Kharghar, Navi Mumbai, to the new Jatni facility under actual operating conditions.
- Cybersecurity training: Provide guaranteed, subsidised training for cooperative banks, regional rural banks (RRBs) and smaller non-banking financial companies (NBFCs), including courses in Indian languages.
- AI-assisted security testing: Conduct continuous adversarial testing using advanced AI tools to identify vulnerabilities beyond routine compliance audits.
- Indigenous cyber defence: Develop domestic capabilities to reduce dependence on foreign AI technologies that could become inaccessible because of export restrictions.
- Post-quantum security: Establish a time-bound plan to transition payment and settlement systems to quantum-resistant cryptography.
Calls for coordination among financial regulators
Sidhu said the RBI, Securities and Exchange Board of India (SEBI), National Payments Corporation of India (NPCI), Clearing Corporation of India (CCIL) and International Financial Services Centres Authority (IFSCA) should strengthen coordination against cyber threats.
He proposed common security standards, shared threat intelligence and joint exercises, while retaining independent infrastructure at individual institutions to prevent a breach in one system from spreading to others.
He also urged the RBI to lead an annual joint cyber stress test involving SEBI, the National Stock Exchange, the Bombay Stock Exchange and commodity exchanges. The proposed exercise would cover payment and settlement systems, foreign exchange and hedging infrastructure.
A copy of the letter has been sent to the Union Finance Minister to facilitate coordination with SEBI and other statutory agencies.
Sidhu, a 1984-batch retired IAS officer, served as Punjab’s Special Chief Secretary before retiring in 2021. He also served as Principal Secretary (Finance), Punjab, from 2010 to 2012, and is the founder-editor of The KBS Chronicle.