RBI constitutes 8-member committee to develop framework for ethical AI in financial sector

The RBI’s committee to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the financial sector will identify potential risks associated with AI, if any, and recommend an evaluation, mitigation and monitoring framework and consequent compliance requirements for financial institutions.

The financial institutions include banks, non-banking finance companies, payment system operators, etc.

As per the terms of reference, the eight-member committee constituted by the RBI will recommend a framework including governance aspects for responsible, ethical adoption of AI models/applications in the Indian financial sector.

Assessing AI adoption

The committee, headed by Pushpak Bhattacharyya, Professor, Department of Computer Science and Engineering, IIT Bombay, will assess the current level of adoption of AI in financial services, globally and in India. It will also review regulatory and supervisory approaches on AI with focus on financial sector globally.

The committee will submit its report within six months from the date of its first meeting.

Besides Bhattacharyya, the others members of the committee are Debjani Ghosh, Distinguished Fellow, NITI Aayog; Independent Director, Reserve Bank Innovation Hub; Balaraman Ravindran, Professor and Head, Wadhwani School of Data Science and AI, IIT Madras; Abhishek Singh, Additional Secretary, Ministry of Electronics and Information Technology, Government of India ; Rahul Matthan, Partner, Trilegal; Anjani Rathor, Group Head and Chief Digital Experience Officer, HDFC Bank.; Sree Hari Nagaralu, Head of Security AI Research, Microsoft India (R&D) and Suvendu Pati, CGM, FinTech Department, Reserve Bank of India (Member-Secretary).