India’s banking sector is preparing for emerging technology risks as the government directs banks to develop a common 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 requirements, with a working group led by the State Bank of India chairman examining the issue, according to an industry executive. Discussions also cover frontier AI models, their associated risks and a sector-wide framework to address AI-driven cyber threats.
A major 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 becomes powerful enough.
Banks assess post-quantum security risks
The finance ministry has asked banks to evaluate vulnerabilities to quantum attacks and begin mitigation measures, an official said. “Each bank can prepare its internal strategy, but there has to be some common industry parameters,” the official added.
Public sector banks had earlier been encouraged to explore advanced, quantum-resistant encryption as an additional security layer under hackathon themes. Under the banking reform agenda Ease 9.0, state-run banks must also assess and define institution-specific technology stacks and infrastructure for generative AI implementation.
In May, the Department of Science and Technology warned in its report, Quantum-Safe Ecosystem in India, that attackers could already be collecting encrypted information through “harvest now, decrypt later” (HNDL) and “trust now, forge later” (TNFL) campaigns. These efforts could allow them to decrypt stored data or forge trusted information once quantum capabilities advance.
“The transition to quantum-safe security is therefore a matter of strategic foresight, national security, and economic resilience,” the report said.
It also stated 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 data, weaken trust in digital governance, threaten financial systems and force emergency security upgrades during a crisis.
In September, a report by a professional services firm urged banks to begin preparing for post-quantum cryptography migration immediately. It noted that most banks remain in the early stages of readiness and that boards, chief information security officers and regulators are likely to treat quantum preparedness as a key risk management priority.
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