RBI FREE-AI Report: 7 Sutras for Ethical AI in Finance
Why in the news
RBI published its committee’s report on the Framework for Responsible and Ethical Enablement of AI (FREE-AI).
Key facts
- Committee set up after RBI’s 6 December 2024 policy statement.
- Chair: Dr. Pushpak Bhattacharyya.
- Goal: spur innovation while protecting fairness, transparency, accountability and customers.
Seven sutras
- Trust is the foundation.
- People first.
- Innovation over restraint.
- Fairness and equity.
- Accountability.
- Understandable by design.
- Safety, resilience, sustainability.
Benefits and challenges
- Benefits: faster loans and compliance, better credit scoring, chatbots, real-time fraud detection.
- Challenges: privacy risk, bias, cost, no universal standards, hacking, black-box opacity.
Recommendations
- Shared AI infrastructure for regulated entities.
- AI innovation sandbox.
- Indigenous AI models for local banking.
- Board-approved AI policy.
- AI-specific risk checks before launch.
- AI inside grievance redress and audits.
- Strong cyber-incident response.
Exam angle
- Seven sutras; chair Dr. Bhattacharyya.