New Delhi, April 24: Finance Minister Nirmala Sitharaman on Friday sounded a fresh alarm over risks posed by Anthropic's Mythos AI model to India's banking sector, even as she assured that Indian lenders are currently well-equipped to handle emerging technology-driven threats. Her remarks signal a significant escalation in the government's scrutiny of advanced artificial intelligence systems with potential implications for financial security.

What FM Sitharaman Said About Mythos AI

Finance Minister Sitharaman told reporters that India is closely tracking potential threats arising from Anthropic's Mythos AI model, which has attracted global attention due to its sophisticated and advanced capabilities. She described the risks as "unprecedented", a characterisation she had first introduced a day earlier.

The minister confirmed that the Ministry of Electronics and Information Technology (MeitY) is actively coordinating with international governments and regulatory authorities to assess the model's possible impact on India's banking and financial ecosystem. This multilateral engagement underscores how seriously New Delhi is treating the threat landscape posed by next-generation AI systems.

Banks Asked to Collaborate; IBA to Lead Consultations

FM Sitharaman stressed that while Indian banks continue to demonstrate resilience, the fast-evolving nature of artificial intelligence demands a higher level of institutional vigilance. She called for coordinated action among lenders, directing them to work together in addressing shared vulnerabilities.

The Indian Banks' Association (IBA) has been tasked with spearheading sector-wide consultations among lenders to strengthen preparedness and develop a unified response framework. This marks a structured, industry-level approach to AI-related financial security — one that goes beyond individual bank-level risk management.

The Finance Minister also indicated that existing regulatory and cybersecurity frameworks may require significant updates to effectively counter newer, more sophisticated threats emerging from advanced AI architectures like Mythos.

Why This Matters: The Bigger AI Security Picture

The government's concern over Anthropic's Mythos model reflects a broader global anxiety about the dual-use potential of frontier AI systems. Advanced language and reasoning models can be weaponised for financial fraud, deepfake-based identity theft, phishing at scale, and automated cyberattacks — all of which directly threaten banking infrastructure.

Notably, India's banking sector has witnessed a sharp rise in cyber fraud incidents over the past three years. According to RBI data, digital fraud cases in the financial sector have grown significantly, making the timing of FM Sitharaman's warning particularly relevant. The emergence of AI models capable of mimicking human reasoning at scale amplifies these existing vulnerabilities manifold.

Critics and cybersecurity experts argue that India's regulatory frameworks, many of which predate the generative AI era, are ill-equipped to handle threats from models as capable as Mythos without urgent legislative and technical overhaul.

India's Fiscal Strength Provides Policy Buffer

Separately, FM Sitharaman reiterated India's strong macroeconomic footing, which she said gives the Reserve Bank of India (RBI) greater flexibility in monetary policy decisions. Speaking at the golden jubilee celebrations of the National Institute of Public Finance and Policy on April 6, she stated: "India has fiscal space with room to maintain the government's capex programme, room for the RBI to cut rates and room to offer targeted support to affected sectors. This is the dividend of a decade of fiscal discipline that is paying dividends."

India's robust foreign exchange reserves and a disciplined fiscal trajectory, she noted, provide the government with the capacity to respond to external shocks — including technology-driven disruptions to the financial system — without compromising macroeconomic stability.

What Happens Next

The Indian Banks' Association is expected to initiate formal consultations among member banks in the coming weeks, with findings likely to inform updated cybersecurity guidelines from the RBI. MeitY's ongoing engagement with international counterparts may also feed into India's evolving AI governance framework, including the proposed Digital India Act. As frontier AI models grow more powerful, the intersection of artificial intelligence and financial security is set to become one of the most critical policy battlegrounds of the decade.