RBI’s AI risk framework to strengthen governance, oversight of AI models

RBI is planning new rules to manage risks from AI and machine learning in banks, so that these technologies are used safely and properly.

Banks will have to create a clear system (MRMF) to manage risks of all models, including AI models, and get it approved by their board.

The bank’s board will regularly review these systems, decide how much risk they can take, and check risks using stress tests and different scenarios.

They will also need to approve proper rules for managing and classifying risks related to these models.