RBI Forms 8-Member 'FREE-AI' Committee To Guide Ethical Use Of AI In Financial Sector

The committee's objective will be to evaluate the current level of AI adoption in financial services, both globally and in India. It will also review global regulatory and supervisory approaches to AI

The committee, supported by the RBI's fintech department, is expected to submit its report within six months of its first meeting

Source : PTI

The Reserve Bank of India (RBI) announced on Thursday the formation of a committee called FREE-AI, tasked with developing a framework for the responsible and ethical use of artificial intelligence (AI). The eight-member panel will be chaired by Pushpak Bhattacharyya from the Department of Computer Science and Engineering at IIT Bombay. 

The committee, supported by the RBI's fintech department, is expected to submit its report within six months of its first meeting.

The other members of the panel are: Debjani Ghosh (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); Rahul Matthan (Partner, Trilegal); Anjani Rathor (Group Head and Chief Digital Experience Officer, HDFC Bank); Hari Nagaralu (Head of Security AI Research, Microsoft India); and Suvendu Pati (CGM, FinTech Department, RBI).

The committee's objective will be to evaluate the current level of AI adoption in financial services, both globally and in India. It will also review global regulatory and supervisory approaches to AI, particularly in the financial sector.

FREE-AI will identify potential risks related to AI and propose a framework for evaluation, mitigation, and monitoring. The committee will also address compliance requirements for financial institutions, including banks, NBFCs, fintechs, and payment system operators.

Furthermore, the committee will recommend a governance framework for the responsible and ethical adoption of AI models and applications in the Indian financial sector, along with any other matters related to AI within the sector.

Earlier this month, former RBI Governor Shaktikanta Das announced the establishment of the committee as part of his final monetary policy statement.

This development comes amid significant changes in the financial sector, driven by the rise of emerging technologies such as AI, machine learning, tokenization, and cloud computing. While these technologies offer numerous benefits, they also present considerable risks, including algorithmic bias, decision explainability, and data privacy concerns, among others.

The committee will consist of experts from various fields and will propose a robust, comprehensive, and flexible AI framework for the financial sector.