The Reserve Bank of India (RBI) has released a report proposing a framework for the responsible and ethical use of artificial intelligence in the financial sector. The Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) aims to promote innovation while ensuring fairness, transparency, and risk mitigation.
The framework outlines 26 actionable recommendations under six strategic pillars: Infrastructure, Policy, Capacity, Governance, Protection, and Assurance. These recommendations aim to balance innovation with safeguards against bias, opacity, and systemic risk.
The RBI's FREE-AI framework envisions a financial ecosystem where innovation and risk management work together to ensure AI adoption benefits consumers, institutions, and the economy at large. Industry experts have welcomed the framework, noting that it places trust, fairness, and accountability at the heart of adoption and can help the sector move from pilots to resilient AI systems.
The framework also emphasizes the importance of ongoing monitoring of AI systems, consumer awareness, and dedicated AI governance committees to oversee these functions and maintain alignment with regulatory expectations. By adopting this framework, India can set a benchmark for ethical AI governance in financial systems worldwide, reinforcing its position as a leader in technology-driven financial reform.
