RBI Panel Pushes AI Framework for Finance

The Reserve Bank of India (RBI) has called for a structured framework to guide the use of artificial intelligence in finance, stressing that innovation must advance in step with risk safeguards. The recommendations come from an eight-member committee, led by IIT Bombay professor Pushpak Bhattacharyya, which released its report this week.

The panel put forward 26 recommendations across six key areas: infrastructure, capacity, policy, governance, protection, and assurance. Among the proposals, it urged the creation of a digital infrastructure to support indigenous AI models built for India’s financial ecosystem, reducing reliance on foreign technology. It also called for a dedicated fund to incentivize the development of homegrown AI solutions, along with a multi-stakeholder standing committee to oversee risks and opportunities in AI deployment.

Another crucial suggestion was ensuring regulatory alignment. The committee advised building an enabling framework that would allow AI integration into digital public platforms such as UPI. In parallel, the report stressed the need for audit frameworks to guarantee responsible oversight of AI-powered systems in banking, payments, and insurance.

The RBI emphasized that the vision is not to stifle innovation but to align it with strong safeguards. “Encouraging innovation is in harmony, and not at odds, with mitigation of risk,” the bank noted. The committee, first established in December, framed its work under the FREEAI initiative—Responsible and Ethical Enablement of Artificial Intelligence for the financial sector.

If adopted, the recommendations could provide India with a blueprint for AI in finance, ensuring the country benefits from rapid technological advances while preserving public trust in digital finance.

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