The rapid integration of Artificial Intelligence (AI) technologies in the banking sector has revolutionized customer interaction, with AI-powered chatbots emerging as a critical interface for service delivery, query resolution, and customer engagement. The adoption of AI-powered banking chatbots (AIBC) has reshaped customer service by offering instant query resolution, personalised financial advice, and uninterrupted support. AI-powered banking chatbots (AIBC) have seen rapid adoption in India, transforming customer service and operational efficiency in the financial sector. According to industry reports, over 75% of Indian banks have implemented chatbots to assist with account inquiries, fund transfers, and loan eligibility checks, with leading banks such as HDFC (Eva), SBI (SBI Intelligent Assistant), and ICICI (iPal) reporting millions of monthly interactions. It is estimated that chatbot usage in Indian banking has reduced operational costs by up to 30% while improving customer engagement and satisfaction through 24/7 availability and personalised interactions. The chatbot market in India is projected to grow at a compound annual growth rate (CAGR) of 24.1% between 2021 and 2026, driven by increasing smartphone penetration and digital literacy. This growing reliance on AI chatbots underscores their pivotal role in shaping the future of Indian banking.