Mumbai: A Reserve Bank of India (RBI) report on the use of artificial intelligence (AI) in the financial sector has recommended that regulated entities formulate a board-approved AI policy and advised regulators to promote AI-driven innovation that supports financial inclusion, particularly for underserved and unserved populations.
In its December 2024 monetary policy statement, the RBI had announced the formation of a committee to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the financial sector.
"The Committee has developed seven Sutras to serve as foundational principles for AI adoption. Guided by these Sutras, the Committee has proposed a forward-looking approach with 26 actionable recommendations across six strategic pillars," the RBI said. "The report envisions a financial ecosystem where innovation and risk mitigation are aligned."
The seven sutras outlined as core principles are: Trust is the foundation; People first; Innovation over restraint; Fairness and equity; Accountability; Understandable by design; and Safety, resilience and sustainability.
The eight-member committee, chaired by Pushpak Bhattacharyya, professor at IIT Bombay, recommended that the RBI issue a consolidated AI guidance document. This would serve as a single point of reference for regulated entities and the broader fintech ecosystem on the responsible design, development and deployment of AI solutions.
The committee also proposed the establishment of a permanent, multi-stakeholder AI standing committee under the RBI to provide ongoing advice on emerging opportunities and risks, and to monitor the evolution of AI technologies.
To address AI-related risks, the report suggested expanding product approval processes, consumer protection frameworks and audit mechanisms to include AI-specific considerations.
In its December 2024 monetary policy statement, the RBI had announced the formation of a committee to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the financial sector.
"The Committee has developed seven Sutras to serve as foundational principles for AI adoption. Guided by these Sutras, the Committee has proposed a forward-looking approach with 26 actionable recommendations across six strategic pillars," the RBI said. "The report envisions a financial ecosystem where innovation and risk mitigation are aligned."
The seven sutras outlined as core principles are: Trust is the foundation; People first; Innovation over restraint; Fairness and equity; Accountability; Understandable by design; and Safety, resilience and sustainability.
The eight-member committee, chaired by Pushpak Bhattacharyya, professor at IIT Bombay, recommended that the RBI issue a consolidated AI guidance document. This would serve as a single point of reference for regulated entities and the broader fintech ecosystem on the responsible design, development and deployment of AI solutions.
The committee also proposed the establishment of a permanent, multi-stakeholder AI standing committee under the RBI to provide ongoing advice on emerging opportunities and risks, and to monitor the evolution of AI technologies.
To address AI-related risks, the report suggested expanding product approval processes, consumer protection frameworks and audit mechanisms to include AI-specific considerations.
You may also like
Tamil Nadu Guv warns against forces seeking to undermine national unity
Man Utd in talks to complete midfielder transfer after making Carlos Baleba swap decision
Adani International School supports ISSO to redefine sporting excellence in India
The spicy 'red chilli' has many benefits, it is good for the eyes and heart.
Strictly star George Clarke's hugely successful producer dad as he's revealed as nepo baby
