India can aspire to become a trusted global hub for responsible AI in finance, says RBI Deputy Governor T Rabi Sankar

Reserve Bank of India Deputy Governor T Rabi Sankar said that the path for responsible AI in India?s financial sector is exciting yet deliberate, demanding a phased approach that balances innovation, inclusion and stability. AI literacy for consumers to understand both the potential and risks of AI will be critical, he said. Just as financial literacy has been a national priority, the coming decade will require a parallel focus on AI literacy, for individuals to engage confidently and safely with these new tools.

Speaking at a session on ?Responsible AI for Finance, he noted that the focus needs to be on awareness and capacity building. Financial institutions, technology providers, and regulators must train personnel, strengthen internal governance structures, and introduce initial risk frameworks to ensure that AI deployment is encouraged with focus on safety. Awareness campaigns and workshops can also help smaller institutions and FinTechs integrate AI responsibly. In the medium term, the FREE-AI principles should guide the industry practice. AI can begin to play a substantial role in SupTech, credit decisioning, and financial inclusion. In parallel, the industry should develop its own governance standards, self-regulatory codes, and ethical guidelines to complement regulatory oversight.

According to him, in the long term, India can aspire to become a trusted global hub for responsible AI in finance. By demonstrating how innovation can coexist with strong safeguards, India can set an example for emerging economies and the Global South, attracting talent, investment, and collaboration. It is essential to reiterate that AI must remain a force for good - empowering individuals, strengthening institutions, and enhancing the resilience of our financial system. Its promise will be realised only when adopted responsibly, with constant attention to societal impact, the Deputy Governor noted.

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