The Reserve Bank of India (RBI) has constituted a high-level committee to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the financial sector.

The move, first announced on December 6 alongside the monetary policy statement, aims to ensure responsible and ethical use of AI technologies across India’s financial ecosystem.

The committee will be chaired by Pushpak Bhattacharyya, professor in the Department of Computer Science and Engineering at IIT Bombay, and comprises a distinguished panel of experts from academia, industry, and government sectors. The FinTech Department of RBI’s Central Office will provide secretarial support to the committee.

The committee has been tasked with several key responsibilities, including:

1. Assessing AI adoption: Evaluating the current level of AI adoption in the financial sector, both globally and within India.

2. Regulatory review: Reviewing regulatory and supervisory approaches for AI applications, with a focus on global best practices in the financial sector.

3. Risk identification: Identifying potential risks associated with AI technologies in financial services.

4. Framework recommendations: Proposing a governance framework for responsible and ethical AI adoption, addressing compliance requirements for banks, NBFCs, FinTech companies, payment system operators, and other financial institutions.

5. Monitoring and mitigation: Recommending strategies for evaluation, mitigation, and ongoing monitoring of AI-related risks.

The committee has been directed to submit its report within six months of its first meeting, providing actionable recommendations to enable ethical AI integration across the financial sector.