Beyond Retail Banking: SBI Chairman Setty Wants AI to Transform Farms and MSMEs

Artificial intelligence is rapidly becoming a key component of India’s banking transformation, but its next phase must extend beyond retail banking and customer-facing services, State Bank of India (SBI) Chairman C S Setty said at the FIBAC 2026 conference. He emphasised that AI should increasingly be used to expand access to credit for farmers, rural communities and micro, small and medium enterprises (MSMEs).

AI Can Transform Credit Access for Farmers and MSMEs

According to Setty, the real potential of AI in banking lies in using data and technology to address the credit requirements of underserved segments. Farmers and small businesses often face challenges in accessing formal credit because conventional lending models can struggle to assess their financial profiles.

AI-driven analytics can help banks evaluate larger and more diverse datasets, improve risk assessment and potentially make lending decisions faster and more accurately. This could enable financial institutions to serve rural borrowers and MSMEs more efficiently while reducing the limitations of traditional credit assessment.

The approach is particularly relevant for India, where agriculture and small businesses play an important role in employment, economic activity and financial inclusion. Expanding technology-enabled lending to these sectors could make AI a tool not only for improving banking efficiency but also for supporting broader economic growth.

Responsible AI, Cybersecurity and Human Oversight Remain Critical

While AI offers significant opportunities, its expansion also creates new risks for banks. Setty highlighted the importance of strengthening cybersecurity, governance and human oversight as financial institutions increase their reliance on artificial intelligence.

SBI has already been investing in technology, data analytics, AI and digital infrastructure as part of its broader “Digital First, Customer First” strategy. The bank has also identified AI applications across areas such as risk management, fraud monitoring, regulatory reporting and customer engagement.

The future of AI-led banking, therefore, is unlikely to be about replacing human decision-making entirely. Instead, the focus will be on combining advanced analytics with human expertise, robust governance and responsible technology deployment.

For Indian banking, the message is clear: AI’s success should not be measured only by better digital experiences for retail customers. Its larger impact could come from helping farmers, MSMEs and underserved communities gain faster and more inclusive access to formal finance.