By offering clear guidelines for data processing, permission and security, the policy aims to maintain the integrity of the activities of the reserve bench and at the same time use the opportunities that AI offers, RBI said. | Photocredit: Danish siddiqui
During the current financial year, the Reserve Bank of India (RBI) will draw up a framework for a responsible and ethical acceptance of artificial intelligence (AI) in the financial sector, according to the central bank’s annual report.
Driven by rapid progress in the computing power and the enormous availability of digital data, AI and Machine Learning (ML) technologies have seen a growing interest and considerable progress in recent years, with financial institutions increasingly assuming these technologies worldwide and in the interior.
The reserve bank will draw up a framework for a responsible and ethical acceptance of AI in the financial sector, according to the agenda for 2025-26 spelled in the RBI annual report for 2024-25.
“The reserve Bank is investigating and implementing AI/ML-driven solutions in its own functions,” said it.
It formed an external committee in December 2024, consisting of experts with a mandate to recommend a framework for a responsible and ethical engaging of AI in the financial sector.
The reserve Bank said it has taken various measures to protect the financial system by further strengthening the legal and supervisory framework of bank and non-bank sectors in accordance with global best practices.
In the future, the RBI said that, among other things, joint efforts would be made towards rationalization and harmonization of regulations between regulated entities; Preparing a framework for a responsible and ethical acceptance of AI in the financial sector; and strengthening liquidity stress tests from commercial banks, among others.
Furthermore, the coordination of existing complaints management and complaint repair mechanism, including exploring the use of AI, would remain in focus, according to the report.
On the AI board policy, the report said that framework for the AI/Machine Learning (ML) technologies, suppliers and partners of third parties will be started.
By offering clear guidelines for data processing, permission and security, the policy aims to maintain the integrity of the activities of the reserve bank and at the same time use the opportunities that AI offers, it said.
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Published on May 30, 2025
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