Artificial Intelligence (AI) has brought revolution in the banking industry by detecting fraud, resolve customer inquiries, monitor customer behavior and recommend personalized services. This paper explores the awareness and application of artificial intelligence in banking services in Badarpur, Barak Valley, Assam. This research also highlights the benefits and challenges associated with the integration of AI in the financial sector by a comprehensive analysis of the body of existing literature. The results exhibit how AI technologies have made impact on decision-making, reduced operating costs and increased overall profitability. However, in order to guarantee the ethical and sustainable application of AI in the future, it is crucial to address issues with data privacy, prejudice and ethical reasons. Data have been collected through primary data and secondary data. Primary data have been collected through questionnaire and secondary data have also been collected such as reports, journals, RBI data etc. The study is confined to Badarpur town which comes under Barak Valley, Assam, India.  There are eight banks in the Badarpur town. Out of eight banks, four Government Banks such as SBI, PNB, CBI and AGVB and four Private Banks such as Axis, ICICI, HDFC and Bandhan Bank have been taken into consideration.