Mumbai: The Reserve Bank of India (RBI) has constituted an eight-member committee to develop a framework for the ethical and responsible use of artificial intelligence (AI) in the financial sector. The initiative aims to address the growing adoption of AI in financial services and the associated risks.
Areas of intervention of the panel
The committee, led by Pushpak Bhattacharyya, professor in the department of computer science and engineering at IIT Bombay, will assess the current status of AI adoption in the financial sector in India and globally. It will also examine international regulatory approaches to AI, with a focus on financial services.
Additionally, the panel will identify risks related to AI applications in the sector and propose a framework for their assessment, mitigation and monitoring. This framework will include compliance guidelines for financial institutions, such as banks, non-banking financial companies (NBFCs), FinTechs and payment systems operators (PSOs).
Governance and ethical AI
The group’s mandate includes developing a governance framework for the ethical adoption of AI models and applications in the Indian financial ecosystem. The RBI emphasized that this step is crucial to ensure transparency, accountability and fairness in the implementation of AI.
Composition of the Committee
The committee is made up of experts from various fields:
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Debjani Ghosh (Independent Director, Reserve Bank Innovation Hub)
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Balaraman Ravindran (Director, Wadhwani School of Data Science and AI, IIT Madras)
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Abhishek Singh (Additional Secretary, Ministry of Electronics and IT)
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Rahul Matthan (partner, Trilegal)
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Anjani Rathor (Group Head and Chief Digital Experience Officer, HDFC Bank)
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Sree Hari Nagaralu (AI Security Research Lead, Microsoft India)
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Suvendu Pati (CGM, FinTech Department, RBI)
Chronology
The group was tasked with submitting its recommendations within six months of its first meeting.
The move comes as AI increasingly influences decision-making in financial services, raising concerns about data privacy, algorithmic bias and regulatory gaps. By establishing ethical guidelines, the RBI aims to ensure that the adoption of AI improves efficiency without compromising fairness or consumer trust.
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