RBI Forms Committee for Ethical AI Framework in Financial Sector, Report will be submitted in 6 months


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The Reserve Bank of India (RBI) has announced the establishment of a committee to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the financial sector. This initiative was part of the Statement on Developmental and Regulatory Policies released alongside the Monetary Policy Statement on December 6, 2024.

Committee Composition

The FREE-AI Committee comprises experts from academia, industry, and government, with the following members:

NameRole
Dr. Pushpak BhattacharyyaChairperson; Professor, Department of Computer Science and Engineering, IIT Bombay
Ms. Debjani GhoshMember; Distinguished Fellow, NITI Aayog; Independent Director, RBI Innovation Hub; Ex-President, NASSCOM
Dr. Balaraman RavindranMember; Professor and Head, Wadhwani School of Data Science and AI, IIT Madras
Shri Abhishek SinghMember; Additional Secretary, Ministry of Electronics and IT, Government of India
Shri Rahul MatthanMember; Partner, Trilegal
Shri Anjani RathorMember; Group Head and Chief Digital Experience Officer, HDFC Bank Ltd.
Shri Sree Hari NagaraluMember; Head of Security AI Research, Microsoft India (R&D)
Shri Suvendu PatiMember Secretary; Chief General Manager, FinTech Department, RBI

The FinTech Department of the RBI will provide secretarial support, and the committee may consult domain experts, industry stakeholders, and RBI departments as needed.

Terms of Reference

The committee has been tasked with:

  1. Assessing AI Adoption: Evaluating the current adoption of AI in financial services in India and globally.
  2. Reviewing Global Regulations: Analyzing regulatory and supervisory approaches to AI, particularly in the financial sector worldwide.
  3. Identifying Risks: Highlighting potential risks associated with AI and recommending frameworks for evaluation, mitigation, and monitoring, applicable to financial institutions like banks, NBFCs, FinTechs, and Payment System Operators (PSOs).
  4. Proposing Governance Framework: Suggesting governance structures for responsible and ethical use of AI models in the Indian financial sector.
  5. Additional AI Concerns: Addressing any other matters related to AI in financial services.

Timeline

The committee will submit its report within six months from the date of its first meeting. This initiative underscores the RBI’s commitment to fostering innovation while ensuring ethical and secure AI adoption in the financial ecosystem.

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