Why RBI Has Set Up 8-Member Committee To Recommend Framework For AI In Financial Sector

New Delhi: An 8-member committee has been set up by the Reserve Bank of India (RBI) to recommend a framework for Responsible and Ethical Enablement of AI (FREE-AI) in the financial sector. The committee comprises of experts from diverse fields and will submit its report within six months from the date of its first meeting, the reserve bank said in a statement.

The financial sector landscape is witnessing rapid transformation, enabled by technologies such as AI, tokenisation, and cloud computing.

In order to harness the benefits from these technologies, while addressing the associated risks such as algorithmic bias, explainability, data privacy, RBI, in the recently held monetary policy review meeting, had indicated it would set up a committee for a framework for responsible and ethical AI usage.

Who will be part of RBI's 8-member committee and what it's going to recommend?

The eight-member committee will be chaired by Pushpak Bhattacharyya, Professor, Department of Computer Science and Engineering, IIT Bombay.

Other members are Debjani Ghosh, Distinguished Fellow, NITI Aayog, Independent Director, Reserve Bank Innovation Hub and Ex-President, NASSCOM; 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 and Sree Hari Nagaralu, Head of Security AI Research, Microsoft India (R&D). 
Suvendu Pati, CGM, FinTech Department, Reserve Bank of India will serve as Member Secretary.

FinTech Department, Central Office of the Reserve Bank of India will provide secretarial support to the Committee.

The committee may also invite domain experts, industry representatives, RBI departments and other stakeholders, as may be required, for consultations and or to participate in its deliberations.

The Terms of Reference of the Committee include assessing the current level of adoption of AI in financial services, globally and in India; to review regulatory and supervisory approaches on AI with a focus on the financial sector globally; to identify potential risks associated with AI, if any and recommend an evaluation, mitigation and monitoring framework and consequent compliance requirements for financial institutions, including banks, NBFCs, FinTechs and PSOs.

The committee will also recommend a framework including governance aspects for responsible, ethical adoption of AI models/applications in the Indian financial sector.