Summary of this article
Artificial intelligence (AI) has quietly become a key part of banking operations, powering everything from loan underwriting and fraud detection to customer service and internal risk monitoring. But as financial institutions increasingly depend on automated systems, the Reserve Bank of India (RBI) now wants stronger safeguards around how these models are deployed and monitored.
In draft guidelines released this week, the RBI proposed a new Model Risk Management Framework that requires banks and regulated entities to establish governance, risk management and control systems for all models, including AI and machine learning (ML) systems. Stakeholders can submit feedback on the draft framework until July 24.
