YES Bank is moving toward homegrown AI models like Sarvam and BharatGen to lower operational costs and improve back-office tasks. The strategy focuses on balancing innovation with strict data security, as the bank looks to modernize its digital infrastructure over the next 18 months. On September 1, 2026, the bank's stock was trading around ₹22.
YES Bank is shifting its technological strategy by exploring the use of homegrown artificial intelligence models to manage rising operational costs. The bank, which recently hosted an 'AI Fest' to engage with the local technology ecosystem, is looking to move away from relying solely on expensive, large-scale international AI models.
Strategic Shift Toward Localized AI
CIO Mahesh Ramamoorthy has indicated that models developed within India, such as Sarvam or BharatGen, are being evaluated for specific tasks like document extraction and text processing. These localized models are designed to better handle Indian language contexts and are expected to be more cost-effective compared to international frontier models that often charge high fees for token usage. By developing or integrating these local solutions, the bank aims to gain more control over its technology spending.
Operational Focus and Implementation
Investors should note that the bank is prioritizing internal efficiency over customer-facing applications for now. The current focus is on back-office operations such as financial reconciliation, compliance, and fraud monitoring. The bank plans to keep these tools away from retail customers until it establishes robust governance and security frameworks. The transition is part of a 12-to-18-month plan to modernize the bank's complex legacy infrastructure, a process that requires careful integration to avoid disruptions to daily banking services.
Regulatory and Risk Context
As a regulated entity, YES Bank is operating under a board-approved policy that complies with Reserve Bank of India (RBI) standards for responsible AI. A significant risk for the bank involves the long implementation timeline and the challenge of replacing or integrating these new systems with existing legacy software without compromising data privacy or operational integrity. Furthermore, the bank faces potential operational risks associated with relying on the relatively early-stage technology provided by emerging startups.
On September 1, 2026, shares of YES Bank were trading in the range of ₹22.00 to ₹22.13 on the stock exchanges. Investors monitoring the bank's long-term progress may look for updates on the actual deployment of these models and whether they successfully lead to a measurable reduction in technology-related expenses in the upcoming financial quarters.