Cyberattack risks could disrupt markets and erode investor trust, warns FM Sitharaman

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Nirmala Sitharaman highlights growing cyber risks to financial systems and investor confidence
Nirmala Sitharaman highlights growing cyber risks to financial systems and investor confidence

Amid rising digital threats, Nirmala Sitharaman has cautioned that even a single cyberattack could significantly impact financial markets and public confidence.

Speaking at an industry platform, she highlighted that a breach targeting key institutions such as exchanges, depositories, clearing corporations, or large brokers could disrupt markets at a national level, erase wealth, and weaken investor trust.

The warning comes as cyber threats grow more advanced and adaptive. Sitharaman noted that emerging technologies, including AI-driven tools, are increasing the speed and sophistication of attacks, making them more difficult to detect and counter.

She urged financial sector entities to remain “exceptionally vigilant,” stressing that cybersecurity frameworks must evolve alongside these threats. Regulators such as Securities and Exchange Board of India were also advised to strengthen investor protection mechanisms and improve coordination with global counterparts to manage cross-border cyber risks.

The minister further emphasized the need for greater public awareness and proactive regulatory action. She called for stronger systems to address fraudulent digital content, including AI-generated scams, and highlighted the importance of faster response mechanisms to safeguard investors.

Her remarks reinforce cybersecurity as a critical pillar of financial stability. As digital adoption continues to grow, the resilience of financial infrastructure will play a key role in maintaining market integrity and investor confidence.

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