RBI Committee Recommends AI Framework for India’s Financial Sector

A Reserve Bank of India (RBI) committee has proposed a comprehensive framework to develop AI capabilities in the country’s financial sector while managing associated risks. The recommendations, released Wednesday, aim to balance innovation with security and governance.

Key proposals include creating digital infrastructure for building indigenous AI models, establishing a multi-stakeholder committee to assess risks and opportunities, and setting up a fund to support homegrown AI solutions tailored to India’s financial services. The report contains 26 recommendations across six areas: infrastructure, capacity, policy, governance, protection, and assurance.

Other notable suggestions include integrating AI with digital public platforms such as the Unified Payments Interface (UPI) and designing audit frameworks for responsible AI adoption. The committee, led by IIT Bombay computer scientist Pushpak Bhattacharyya, was tasked with developing the Framework for Responsible and Ethical Enablement of AI (FREEAI). The RBI emphasized that regulating AI requires balancing societal benefits with risk mitigation.