Latest news with #Frameworkfor
Business Standard
19 hours ago
- Business
- Business Standard
RBI panel suggests measures for responsible and ethical enablement of artificial intelligence in the financial sector
An RBI panel has recommended that banks and other financial institutions formulate a policy to mitigate risks arising from use of Artificial Intelligence (AI) in the financial sector, saying without guardrails it can exacerbate risks. The Reserve Bank of India (RBI) had set up the committee to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the financial sector in December last year. In its report, published by the RBI on Wednesday, the panel sets out a framework to guide the use of AI in the financial sector, aiming to harness its potential while safeguarding against associated risks.
Indian Express
a day ago
- Business
- Indian Express
India cenbank committee recommends AI framework for finance sector
A Reserve Bank of India committee has recommended a framework for developing AI capabilities for the country's financial sector, while safeguarding it against associated risks, according to a report released on Wednesday. The committee has recommended setting up a digital infrastructure to help build indigenous AI models and a multi-stakeholder standing committee to evaluate risks and opportunities. It also suggested building a fund to incentivise the development of homegrown AI models tailored for the needs of India's financial services sector. 'The report envisions a financial ecosystem where encouraging innovation is in harmony, and not at odds, with mitigation of risk,' the RBI said in a statement. The report contains 26 recommendations under six categories including infrastructure, capacity, policy, governance, protection and assurance. Other key recommendations by the eight-member committee headed by Pushpak Bhattacharyya, a computer scientist at IIT Bombay, include issuing of an enabling framework to integrate AI with existing digital public platforms such as instant payment system UPI, and designing audit frameworks. The central bank had set up the committee in December to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREEAI) for the finance sector. 'The challenge with regulating AI is in striking the right balance, making sure that society stands to gain from what this technology has to offer, while mitigating its risks,' according to the report.
Economic Times
a day ago
- Business
- Economic Times
RBI bats for AI policy backed by boards of regulated entities
Synopsis An RBI committee has recommended that financial entities adopt board-approved AI policies, promoting AI innovation for financial inclusion, especially for underserved populations. The committee outlined seven core principles, or Sutras, and 26 actionable recommendations across six strategic pillars. The RBI envisions a financial ecosystem balancing innovation and risk mitigation through responsible AI adoption. ANI RBI Mumbai: A Reserve Bank of India (RBI) report on the use of artificial intelligence (AI) in the financial sector has recommended that regulated entities formulate a board-approved AI policy and advised regulators to promote AI-driven innovation that supports financial inclusion, particularly for underserved and unserved its December 2024 monetary policy statement, the RBI had announced the formation of a committee to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the financial sector."The Committee has developed seven Sutras to serve as foundational principles for AI adoption. Guided by these Sutras, the Committee has proposed a forward-looking approach with 26 actionable recommendations across six strategic pillars," the RBI said. "The report envisions a financial ecosystem where innovation and risk mitigation are aligned." The seven sutras outlined as core principles are: Trust is the foundation; People first; Innovation over restraint; Fairness and equity; Accountability; Understandable by design; and Safety, resilience and sustainability. The eight-member committee, chaired by Pushpak Bhattacharyya, professor at IIT Bombay, recommended that the RBI issue a consolidated AI guidance document. This would serve as a single point of reference for regulated entities and the broader fintech ecosystem on the responsible design, development and deployment of AI solutions. The committee also proposed the establishment of a permanent, multi-stakeholder AI standing committee under the RBI to provide ongoing advice on emerging opportunities and risks, and to monitor the evolution of AI address AI-related risks, the report suggested expanding product approval processes, consumer protection frameworks and audit mechanisms to include AI-specific considerations.
NDTV
a day ago
- Business
- NDTV
RBI Panel Proposes Fund To Build Homegrown AI Framework For Finance Sector
Mumbai: A Reserve Bank of India (RBI) committee has recommended a framework for developing AI capabilities for the country's financial sector, while safeguarding it against associated risks, according to a report released on Wednesday. The committee has recommended setting up a digital infrastructure to help build indigenous AI models and a multi-stakeholder standing committee to evaluate risks and opportunities. It also suggested building a fund to incentivise the development of homegrown AI models tailored for the needs of India's financial services sector. "The report envisions a financial ecosystem where encouraging innovation is in harmony, and not at odds, with mitigation of risk," the RBI said in a statement. The report contains 26 recommendations under six categories, including infrastructure, capacity, policy, governance, protection and assurance. Other key recommendations by the eight-member committee headed by Pushpak Bhattacharyya, a computer scientist at IIT Bombay, include issuing an enabling framework to integrate AI with existing digital public platforms such as instant payment system UPI, and designing audit frameworks. The central bank had set up the committee in December to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREEAI) for the finance sector. "The challenge with regulating AI is in striking the right balance, making sure that society stands to gain from what this technology has to offer, while mitigating its risks," according to the report.
The Hindu
a day ago
- Business
- The Hindu
RBI prescribes 7 sutras for AI adoption in financial sector
A committee set up by the Reserve Bank of India (RBI) to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the financial sector has recommended the establishment of shared infrastructure by regulated entities (REs) to democratise access to data and compute, and for the creation of an Al Innovation Sandbox. On Wednesday, the panel submitted its report, which has been uploaded on the RBI website. The report sets a framework to guide on the use of AI in the financial sector, aiming to harness its potential while safeguarding against associated risks. The committee has developed 7 sutras to serve as the foundational principles for AI adoption. Guided by the 7 sutras, the committee has recommended a forward-looking approach, containing 26 actionable recommendations under six strategic pillars. The report envisions a financial ecosystem where encouraging innovation is in harmony, and not at odds, with mitigation of risk, the RBI said. The 7 sutras include Trust is the Foundation, People First, Innovation over Restraint, Fairness and Equity, Accountability, Understandable by Design and Safety, Resilience and Sustainability. Using the sutras as guidance, the committee has recommended an approach that fosters innovation and mitigates risks, treating these two seemingly competing objectives as complementary forces that must be pursued in tandem. This is achieved through a unified vision spread across 6 strategic Pillars that address the dimensions of innovation enablement as well as risk mitigation. Under innovation enablement, the focus is on Infrastructure, Policy and Capacity and for risk mitigation, the focus is on Governance, Protection and Assurance. Under these six pillars, the report outlines 26 recommendations for Al adoption in the financial sector. To foster innovation, the panel has recommended the establishment of shared infrastructure to democratise access to data and compute; the creation of an Al Innovation Sandbox and the development of indigenous financial sector-specific Al models. It has also recommended for the formulation of an Al policy to provide necessary regulatory guidance, institutional capacity building at all levels, including the board and the workforce of REs and other stakeholders, the sharing of best practices and learnings across the financial sector and a more tolerant approach to compliance for low-risk Al solutions to facilitate inclusion and other priorities. To mitigate Al risks, the committee has recommended for the formulation of a board-approved Al policy by Regulated Entities, the expansion of product approval processes, consumer protection frameworks and audits to include Al related aspects and the augmentation of cybersecurity practices and incident reporting frameworks. Besides, it has prescribed the establishment of robust governance frameworks across the Al lifecycle and making consumers aware when they are dealing with Al. 'This is the FREE-Al vision: a financial ecosystem where the encouragement of innovation is in harmony with the mitigation of risk,' the committee said in the report.
