India’s banking sector is preparing for emerging technology risks as the government directs banks to develop a coordinated quantum transition strategy and an artificial intelligence (AI) resilience framework. The move follows the classification of the banking, financial services and insurance (BFSI) sector as critical information infrastructure.
Banks are discussing the proposed measures, with a working group led by the State Bank of India chairman examining the issue, according to industry sources. Discussions also cover frontier AI models, their associated risks and a sector-wide framework to address AI-driven cyber threats.
A key concern is the “harvest now, decrypt later” threat, in which attackers collect encrypted banking data today with the intention of decrypting it when quantum computing capabilities advance.
The Finance Ministry has asked banks to assess their post-quantum vulnerabilities and begin mitigation measures. “Each bank can prepare its internal strategy, but there has to be some common industry parameters,” an official said.
Public sector banks have previously been encouraged to explore advanced, quantum-resistant encryption as an additional security layer through hackathon themes. Under the banking reform programme Ease 9.0, state-run banks must also assess and define bank-specific technology stacks and infrastructure for generative AI implementation.
Quantum-safe security gains urgency
In May, the Department of Science and Technology’s report, Quantum-Safe Ecosystem in India, warned that attackers may already be collecting encrypted information through “harvest now, decrypt later” (HNDL) and “trust now, forge later” (TNFL) campaigns. These activities aim to exploit future quantum capabilities to decrypt stored data or undermine trust in digital systems.
“The transition to quantum-safe security is therefore a matter of strategic foresight, national security, and economic resilience,” the report stated.
It also said that by 2027, relevant ministries and regulators must establish and maintain cryptographic asset repositories for critical information infrastructure. These repositories will support inventory management, lifecycle tracking, risk assessment and coordinated migration to quantum-safe systems.
The report warned that delays could expose confidential information, weaken trust in digital governance, put financial systems at risk and force emergency migrations during a crisis.
In September, a consulting firm’s report urged banks to begin preparing for post-quantum cryptography migration immediately. It noted that most banks remain at an early stage of quantum readiness and said boards, chief information security officers and regulators are likely to treat preparedness as a growing risk management priority.
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