RBI proposes guidelines for banks to manage AI risks
FILE PHOTO: A man stands in front of the Reserve Bank of India (RBI) logo inside its headquarters in Mumbai, India, February 6, 2026. REUTERS/Francis Mascarenhas//File Photo
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MUMBAI, June 24 : India’s central bank has proposed rules requiring banks to strengthen oversight of risks tied to AI and machine-learning models, mandating board-approved policies, stronger controls and model inventories.
The Reserve Bank of India said banks must put in place a board-approved risk management framework covering all models, including those for AI and machine-learning.
Regulated entities must assess risk at both the individual model level and across the enterprise on an ongoing basis, the RBI said.
If risks are found to be excessive, lenders should take timely corrective steps, including enhanced controls, restrictions on use, remediation or decommissioning of the model, and submit a report to the board’s risk management committee, the bank added.
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The RBI also said banks should ensure all models, including third-party models, are subject to independent validation.
Banks should establish human oversight for AI models used in automated decision-making, the draft guidelines said. For generative AI models that interface with customers or external users, additional cybersecurity controls should be implemented.
RBI has invited feedback on the draft guidelines by July 24.
Source: Reuters
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