RBI, Sebi: Cybersecurity Now Board-Level Priority

Indian financial regulators, the Reserve Bank of India (RBI) and Securities and Exchange Board of India (Sebi), are intensifying efforts to combat escalating cyber risks. Their focus has shifted from mere IT system security to embedding cyber risk as a fundamental business and governance imperative for regulated entities.

These regulators are expanding training and simulation exercises to prepare for threats, including those from emerging technologies like artificial intelligence (AI). A recent RBI survey highlighted that AI-enabled cyber threats are perceived as the most significant business risk by banks and non-bank lenders for the upcoming 12 months.

The scale of financial fraud remains a concern, with the total amount involved rising by 46.4% to ₹48,021 crore in FY26, even as the number of reported cases decreased. This dynamic nature of cyber fraud, including the rise of 'money mules', has prompted regulators to strengthen their oversight frameworks.

Sebi has introduced initiatives like the Market Security Operations Centre (M-SOC) to provide cost-effective cybersecurity services to smaller entities. The National Stock Exchange and BSE have established M-SOCs, onboarding 376 market participants by March 2026. These efforts are crucial as cyber threats evolve in complexity and frequency.