The Reserve Bank of India (RBI) has unveiled a committee report recommending a framework to foster artificial intelligence in the country’s financial sector while addressing potential risks.

The eight-member panel, chaired by IIT Bombay computer scientist Pushpak Bhattacharyya, suggested building a national digital infrastructure to support homegrown AI models and creating a multi-stakeholder standing committee to assess risks and opportunities. It also called for a dedicated fund to incentivize the development of indigenous AI tailored to India’s financial services.

“The report envisions a financial ecosystem where encouraging innovation is in harmony, and not at odds, with mitigation of risk,” the RBI said in a statement.

Among the 26 recommendations, grouped into six categories — infrastructure, capacity, policy, governance, protection, and assurance — were proposals to integrate AI into digital public platforms like UPI and to design audit frameworks to monitor usage.

The RBI had set up the committee in December to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREEAI). The report underscores the delicate task of regulating AI, noting that “the challenge with regulating AI is in striking the right balance, making sure that society stands to gain from what this technology has to offer, while mitigating its risks.”