The Reserve Bank of India is exploring a major upgrade in banking security.
It has asked banks to share their views on using facial recognition and other AI-based systems at ATMs, bank counters, and branches.
This move is mainly aimed at areas where fraud cases are increasing.
If implemented, the new technology could add an extra layer of safety for customers and make banking more secure.
According to a report by The Economic Times, banks have been asked to highlight both benefits and challenges.
A final decision will be taken after reviewing feedback from both public and private sector banks.
How This Technology Can Improve Safety
If approved, AI-based systems like facial recognition can help detect suspicious activity quickly.
This means fraud can be stopped before it causes major losses.
The RBI has already been focusing on customer safety.
Recently, it also introduced draft guidelines to protect users from online and card-related frauds, including rules for compensation.
This shows a clear push towards safer and smarter banking in India.
Big Challenge: Cost and Implementation
While the idea sounds promising, banks are also facing practical challenges.
One major issue is the cost.
Setting up biometric systems like facial recognition requires new cameras, hardware upgrades, and system integration.
Banks will need to connect this technology with their existing ATM networks and core banking systems.
Not all banks may be ready for such large-scale changes immediately, which is why the RBI is carefully reviewing feedback before making a final decision.
Compensation Rules for Digital Fraud
Along with improving security, the RBI is also working to protect customers financially.
Under the proposed rules, if someone becomes a victim of digital fraud, they can get compensation.
For frauds up to Rs 50,000, customers may receive 85% of the loss or up to Rs 25,000, whichever is lower.
However, this compensation can be claimed only once in a lifetime.
Final Takeaway
The RBI’s plan shows a strong focus on making banking safer with the help of technology.
While there are challenges like cost and implementation, the move could significantly reduce fraud in the future.
At the same time, new compensation rules offer some relief to customers in case things go wrong.
