RBI’s Committee for ethical use of AI in financial sector
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News: The Reserve Bank of India has set up a committee to develop a Framework for Responsible and Ethical enactment of Artificial Intelligence (FREE-AI) in the financial sector. 

About the Committee  

RBI’s Committee for ethical use of AI in financial sector
Source- Indian Express
  • Members: The committee comprises of 8 members and is headed by Dr Pushpak Bhattacharyya. 
  • Objectives: 
    • To assess the current level of adoption of AI in financial services, both globally as well as in India. 
    • To review regulatory and supervisory approaches on AI, keeping in mind the financial sector globally. 
    • To identify potential risks associated with AI
    • To recommend an evaluation, mitigation, monitoring framework and compliance requirements for financial institutions. 
    • To recommend a framework for responsible and ethical adoption of AI models in the Indian financial sector. 
  • Timeline: The committee has to submit its report within 6 months from the date of its first meeting. 

Benefits of AI in financial sector 

  • Improved Operational Efficiency: AI has potential to boost productivity by automating many tasks like loan processing, fraud detection, document processing, customer interactions. 
  • Cost Savings: AI can enable financial institutions to increase their profit margins by carrying out data driven creditworthiness assessments. 
  • Greater Customer Satisfaction: AI tools can be used to enhance customer support, leading to increased customer loyalty. Eg: use of AI powered chatbot. 

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