FREE-AI: RBI Forms Panel for Ethical AI Guidelines

December 30, 2024

The Reserve Bank of India (RBI) has established an eight-member committee named FREE-AI to formulate guidelines for the ethical use of artificial intelligence in financial services. This initiative puts stress on the growing importance of responsible AI practices in the fintech sector. The panel will be chaired by Pushpak Bhattacharyya from IIT Bombay and is expected to submit its report within six months.

Panel Composition

The FREE-AI committee comprises eight members from various sectors. Pushpak Bhattacharyya leads the panel. Other members include Suvendu Pati from RBI, Abhishek Singh from the Ministry of Electronics and Information Technology, and Debjani Ghosh from the Reserve Bank Innovation Hub. Additionally, Dr. Balaraman Ravindran from IIT Madras, Rahul Matthan from Trilegal, and Anjani Rathor, Chief Digital Officer at HDFC Bank, are part of the committee.

Objectives of the Committee

The primary objective of the FREE-AI panel is to study the current applications of AI in financial services. The committee will also review global regulatory frameworks related to AI in the financial sector. By doing so, it aims to understand best practices and potential pitfalls in AI utilization.

The committee will recommend a comprehensive framework for the responsible use of AI models. Key focus areas include governance structures, risk management practices, and ethical considerations in AI deployment. The panel will also identify potential risks associated with AI in finance.

Risk Assessment and Mitigation

The committee will propose methods to evaluate, reduce, and monitor risks linked to AI technologies. This involves assessing the impact of AI on regulated financial institutions and ensuring compliance with ethical standards.

The RBI’s fintech department will provide support to the FREE-AI committee. This collaboration aims to ensure that the guidelines developed are practical and align with the regulatory environment in India.

GKToday Notes:
FREE-AI: FREE-AI is an eight-member panel established by RBI. It focuses on ethical AI use in financial services and aims to propose guidelines within six months.
HDFC Bank: HDFC Bank is a leading private sector bank in India. Anjani Rathor serves as its Chief Digital Officer, contributing to digital transformation and ethical AI practices.
RBI Innovation Hub: The Reserve Bank Innovation Hub encourages fintech innovation in India. Debjani Ghosh represents it on the FREE-AI panel, promoting responsible AI in financial services.

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