Financial institutions should have a comprehensive strategy in place for AI adoption RBI Dy Guv Rao
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Sep 23, 2025 | Page No.: 7 | Position: Middle Left | Source: Bureau | Sq Cm: 201 | AVE: 20065 | PR Value: 100325
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Financial institutions should have a comprehensive strategy in place for AI adoption RBI Dy Guy Rao ences Though banks have be responsible for the de- Our Bureau been using AI in some areas cisions Mumbai of lending there is potential Financial institutions use cases for its usage across while adopting AI for busi- Financial institutions ex- other areas of the credit life- ness processes should im- citement around Al s bene- cycle he said plement the principle of hu- fits should not overshadow man-in the-loop to ensure prudent risk management CLEAR POLICIES that AI is leveraged as a tool according to M Rajeshwar The Deputy Governor said to support and enhance hu- Rao Deputy Governor RBI financial institutions should man decisions and not re- In this regard he emphas- have in place a comprehens- place them ised on aspects such as gov- ive strategy for AI adoption ernance human-in-the-loop It should be accompanied by M Rajeshwar Rao HIGH-QUALITY DATA maintaining data quality and clear policies risk appetites Deputy Governor RBI Rao underscored that high- security and regulatory criticality and impact assess- quality data is the backbone guardrails for new technolo- ments as well as ethical plainability a critical require- of safe and effective AI in fin- gies among others standards that cascade ment he said ance In his keynote address at a through the organisation Thus there is a need for While the RBI already business TV channel s Bank- Robust monitoring and financial institutions to in- collects data through super- ing Transformation Summit reporting mechanisms vest in explainable AI frame- visory reports regulatory re- Rao noted that among emer- should be put in place to en- works that provide clear turns and surveys the intro- ging technologies Artificial sure alignment between in- auditable reasons for loan duction of model risk Intelligence AI stands out novation goals and institu- decisions Strong gov- guidelines aligned with for its vast potential for tional stability Further in a ernance is central to man- global best practices will strengthening internal oper- regulated industry like bank- aging AI-driven model risk soon extend this scope to in- ations and risk management ing it is essential to under- Rao emphasised that clude data on AI models used to delivering faster more stand how a model arrives at while AI can automate and by regulated entities he seamless customer experi- its decisions making ex- recommend humans should said