A committee constituted by the Reserve Bank of India (RBI) released a comprehensive report in August 2025 on the deployment of Artificial Intelligence (AI) in the financial sector. Titled ‘Framework for Responsible and Ethical Enablement (FREE) of Artificial Intelligence’, it addresses key areas such as IT outsourcing, technology risk, governance and controls, operational risks, and resilience. The publication is the result of extensive deliberations among the committee and a wide range of stakeholders, aimed at gathering diverse perspectives on the adoption, opportunities, and challenges of AI in financial services. Those consulted include leading academics, policymakers, corporate bodies, and government officials.
The report begins by outlining major opportunities and challenges in deploying AI within the financial sector. It then examines the global AI policy landscape, approaches adopted by various countries, along with commentary on two surveys conducted by the FinTech Department (FTD) and the Department of Supervision (DoS).
Further, it introduces a framework for responsible AI deployment through seven guiding principles, or “sutras”: Trust, People First, Innovation, Fairness, Accountability, Explainability, and Resilience. These principles are translated into actionable recommendations for regulators, government bodies, self-regulatory organisations (SROs), and regulated entities, structured across six pillars: Infrastructure, Policy, Capacity, Governance, Protection, and Assurance. Key focus areas include financial sector data infrastructure and governance, innovation sandboxes, indigenous AI models tailored to financial services, AI policy and governance, risk management, consumer protection, liability management, and cybersecurity.
