Indian banks are partnering with 25 Original Equipment Manufacturers to build stronger defenses against AI-driven cyber threats, following regulatory warnings about vulnerabilities in third-party software and AI-generated code. A working group led by the State Bank of India, including officials from the Reserve Bank of India, the Ministry of Finance, the National Payments Corporation of India, and CERT-In, is building a new security framework to protect the banking sector. One major concern is reliance on third-party software, cloud providers, and fintech partners, as financial institutions often use licensed software with embedded open-source libraries or AI-generated code that can create widespread points of failure, similar to the Log4j vulnerability. Banks are being instructed to minimize their network attack surface area and will use defensive AI agents to monitor and block threats in real-time. The effectiveness of these measures will be tested through regular assessments, and for investors, the key monitorable is how increased spending requirements on cybersecurity and infrastructure might impact the operating margins of banks.