RBI Sets Up 'FREE-AI' Committee To Develop AI Framework

The Reserve Bank of India on Thursday said it has set up a committee, which will be called as FREE-AI, to develop the framework for responsible and ethical enablement of artificial intelligence.

The eight member panel will be chaired by Pushpak Bhattacharyya from the Department of Computer Science and Engineering, IIT Bombay. The committee, which will be supported by the RBI's fintech department, will be required to submit its report within six months from the date of its first meeting.

The panel will include representatives from NITI Aayog, HDFC Bank, IIT Madras, Ministry of Electronics and Information Technology, law firm Trilegal and Microsoft India.

The aim of the committee will be to 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.

FREE-AI will identify potential risks associated with AI, if any and recommend an evaluation, mitigation and monitoring framework. The committee will also focus on consequent compliance requirements for financial institutions, including banks, NBFCs, fintechs and payment system operators among others.

Additionally, the committee will also recommend a framework including governance aspects for responsible, ethical adoption of AI models or applications in the Indian financial sector and any other matter related to AI in the sector.

Earlier this month, former RBI Governor Shaktikanta Das had announced the setting up of the committee, as part of his last monetary policy announcement.

The development comes in the backdrop of the financial sector landscape witnessing paradigm shifts with the advent of frontier technologies such as AI, machine learning, tokenisation and cloud computing.

While the benefits are many, the attendant risks such as algorithmic bias, explainability of decisions and data privacy, among others are also high.

This committee will comprise of experts from diverse fields and will recommend a robust, comprehensive, and adaptable AI framework for the financial sector.