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ARTICLE · 23 SEPTEMBER 2025

Balancing Innovation And Risk: How India's Financial Regulators Are Approaching Artificial Intelligence

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On August 13, 2025, the Reserve Bank of India ("RBI") released the Framework for Responsible and Ethical Enablement of Artificial Intelligence ("FREE-AI") Committee Report ("FREE AI Report").

IndiaTechnology
Sajai Singh
Sajai Singh
Himanshu Kumar
Himanshu Kumar
Saurav Kumar
Saurav Kumar
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On August 13, 2025, the Reserve Bank of India ("RBI") released the Framework for Responsible and Ethical Enablement of Artificial Intelligence ("FREE-AI") Committee Report ("FREE AI Report"). This marks a step towards India's approach to Artificial Intelligence ("AI") governance. The FREE AI Report lays the foundational principles of responsible and ethical adoption of AI in the banking sector.

The Ministry of Electronics and Information Technology, alongside the sectoral regulators such as RBI and the Securities and Exchange Board of India ("SEBI") have been wary of the increasing adoption and integration of AI and Machine Learning ("ML") across sectors, particularly in the financial product or services sector. Starting with the government's policy wing, NITI Aayog, publishing a series of policy papers on responsible AI principles back in 2018, India has witnessed several policy initiatives by way of sector specific guidance and sub-committee reports aiming to

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