Free-AI: How well India adopts AI will shape its future

An RBI panel on AI adoption has recommended an approach that enables innovation and mitigates risk

- RAHUL MATTHAN

For the past six months, I served on the Reserve Bank of India's (RBI) Committee on the Framework for the Responsible and Ethical Enablement of AI (Free-AI). It has been an enriching experience putting it together, and I am sure I speak for all members of the committee when I say that we are proud of what we produced. Now that we have submitted our report, I am glad to finally be able to write about it.

Unlike most artificial intelligence (AI) regulation frameworks, this is not one that is focused solely on risk. On the contrary, we have proposed a two-pronged approach—one that both enables innovation and mitigates risk. In my view, the weaving together of these two seemingly contradictory sets of objectives is what's novel about this report.

To enable the use of AI in the financial sector, we centered our recommendations around three distinct pillars: infrastructure, policy, and capacity. We proposed the establishment of the sort of data infrastructure that would be necessary for building AI models and, more generally, encouraging the use of AI in the financial sector. There is a lot of financial sector data in disconnected silos that, if organized, can be helpful for building models and developing AI applications. To that end, we have recommended an initial investment of ₹5,000 crore, with an additional ₹1,000 crore per annum over the next five years.