The Reserve Bank of India (RBI) has announced the formation of an eight-member committee, named FREE-AI, to establish a framework for the responsible and ethical enablement of artificial intelligence (AI) in the financial sector. Headed by Pushpak Bhattacharyya, a professor in the Department of Computer Science and Engineering at IIT Bombay, the committee will receive support from the RBI’s fintech department and is expected to submit its report within six months of its inaugural meeting.

The committee’s mandate includes assessing the current state of AI adoption in financial services, analyzing global regulatory and supervisory practices, and proposing a governance framework for ethical AI usage. Additionally, it will identify risks associated with AI implementation and recommend strategies for evaluation, mitigation, and monitoring for regulated entities.

Joining Bhattacharyya on the panel are Suvendu Pati, Chief General Manager at RBI; Abhishek Singh, Additional Secretary, Ministry of Electronics and Information Technology; Debjani Ghosh, independent director at the Reserve Bank Innovation Hub; Dr. Balaraman Ravindran of IIT Madras; Rahul Matthan, Partner at Trilegal; and Anjani Rathor, Chief Digital Officer at HDFC Bank, among others.

This initiative comes as India intensifies its focus on regulating AI, particularly in the financial sector. The Securities and Exchange Board of India (SEBI) recently reminded regulated entities that they bear full responsibility for the AI programs they develop or deploy, including adherence to data privacy norms, compliance with existing laws, and accountability for AI-generated outputs. SEBI has also mandated disclosure of AI usage by Investment Advisers and Research Analysts to their clients.

Meanwhile, the Ministry of Electronics and Information Technology (MeitY) has launched a second round of bids under the “Safe & Trusted AI” pillar of the India AI mission, following the approval of eight proposals in the initial phase.

The developments signal a concerted effort by Indian authorities to ensure AI technologies are deployed responsibly while safeguarding the interests of stakeholders in the financial ecosystem.