Latest news with #andEthicalEnablementofArtificialIntelligence
Business Standard
a day 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
2 days 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
2 days 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.
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Business Standard
2 days ago
- Business
- Business Standard
RBI's AI panel calls for balancing innovation with risk mitigation
The Reserve Bank of India's (RBI's) Committee on the Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the financial sector has recommended an approach that treats the objectives of fostering innovation and mitigating risks as complementary forces to be pursued in tandem. The FREE-AI committee was constituted by the RBI to encourage the responsible and ethical adoption of AI in the financial sector. The committee outlined seven 'sutras' — core principles to guide AI adoption in the financial sector: trust is the foundation; people first; innovation over restraint; fairness and equity; accountability; understandable by design; and safety, resilience, and sustainability. It observed that AI has the potential to unlock new forms of customer engagement, enable alternative approaches to credit assessment, improve risk monitoring and fraud detection, and offer new supervisory tools. However, it cautioned that increased AI adoption could also lead to new risks such as bias and lack of explainability, while amplifying existing challenges related to data protection, cybersecurity, and more. According to the committee, the twin objectives of innovation and risk mitigation can be achieved through a unified vision built on six strategic pillars: Infrastructure, Policy, Capacity, Governance, Protection, and Assurance. These address both innovation enablement and risk mitigation. Its recommendations include establishing a shared infrastructure to democratise access to data, creating an AI innovation sandbox, and developing indigenous, financial sector-specific AI models. The committee also called for the formulation of an AI policy to provide regulatory guidance, as well as institutional capacity building at all levels, including boards, the workforce of regulated entities, and other stakeholders. It recommended sharing best practices and lessons across the financial sector, and taking a more tolerant approach to compliance with regulations for low-risk AI solutions to promote inclusion and other priorities. To mitigate AI-related risks, the committee urged all regulated entities to formulate a board-approved AI policy, expand product approval processes, update consumer protection frameworks and audits to include AI-related aspects, and strengthen cybersecurity practices and incident reporting frameworks. It also recommended establishing robust governance frameworks across the AI lifecycle, and ensuring consumers are informed when they are interacting with AI. 'For an emerging economy like India, AI presents new ways to address developmental challenges. Multi-modal, multi-lingual AI can enable the delivery of financial services to millions who have been excluded,' the FREE-AI committee said, adding that when used responsibly, AI offers tremendous benefits. At the same time, it warned that without guardrails, AI could exacerbate existing risks and create new forms of harm.
