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A committee to develop a framework for responsible and ethical use of AI in the financial sector will be formed, announced RBI Governor Shaktikanta Das.

“In order to harness the benefits of these technologies while addressing the associated risks, such as algorithmic bias, explainability, and data privacy, a committee comprising experts from diverse fields will be set up to recommend a framework for responsible and ethical enablement of AI,” said the governor of the Reserve Bank of India, during the latest Monetary Policy Committee meeting.

Called FREE AI, the committee will look into a framework that will address critical challenges, including algorithmic transparency and protection of user data, and create a roadmap for sustainable AI integration within the financial sector.

In August this year, the RBI had released a draft circular on managing model risks in credit to address uncertainties in AI/ML-based credit appraisal and risk management systems used by digital lenders.