A Reserve Bank of India (RBI) committee has outlined a comprehensive framework to strengthen artificial intelligence (AI) capabilities in the country’s financial sector while ensuring safeguards against potential risks. The recommendations were shared in a report released on Wednesday.
The RBI committee suggested creating a robust digital infrastructure to support the development of indigenous AI models and proposed forming a multi-stakeholder standing committee to assess both risks and opportunities in the sector. It also recommended the establishment of a dedicated fund to incentivise the creation of homegrown AI solutions designed specifically for the needs of India’s financial services industry.
In its statement, the RBI said, “The report envisions a financial ecosystem where encouraging innovation is in harmony, and not at odds, with mitigation of risk.”
The RBI report lists 26 recommendations grouped into six key areas — infrastructure, capacity, policy, governance, protection and assurance. Among the notable suggestions are the creation of an enabling framework to integrate AI with existing digital public platforms such as the Unified Payments Interface (UPI) and the introduction of specialised audit frameworks.
The eight-member panel, led by Pushpak Bhattacharyya, a computer scientist at the Indian Institute of Technology Bombay, was formed in December to design the Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREEAI) for the financial sector.
Highlighting the core challenge of AI regulation, the RBI report states, “The challenge with regulating AI is in striking the right balance, making sure that society stands to gain from what this technology has to offer, while mitigating its risks.”
If implemented, these measures are expected to accelerate the adoption of AI in India’s financial services industry while ensuring that ethical, secure and inclusive practices remain a top priority.
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