RBI Governor Shaktikanta Das announced the formation of a committee to develop a framework for responsible and ethical use of artificial intelligence (AI) in the financial sector.
“In order to harness the benefits of these technologies while addressing associated risks, such as algorithmic bias, explainability and data privacy, a committee comprising experts from various fields will be established to recommend a framework for responsible and ethical AI enablement,” Das said at the Monetary Policy Committee (MPC) meeting on Friday.
The committee, named FREE AI, will address critical challenges such as algorithmic bias, transparency and data privacy, and create a roadmap for the sustainable integration of AI in the financial sector.
Additionally, the RBI is stepping up its efforts against digital financial fraud with the development of MuleHunter.AI, an AI and machine learning (ML)-based tool designed to detect and mitigate the use of mule accounts. It is currently driven by Reserve Bank Innovation Hub (RBIH), a subsidiary of RBI.
“This will help banks quickly address the problem of mule accounts and reduce digital frauds,” Das said.
Das also highlighted ongoing measures including the deployment of cybersecurity frameworks, fraud prevention mechanisms and advanced transaction monitoring systems, as well as a hackathon called Zero Financial Frauds, which aims to develop innovative solutions to fight against fraud.
“We encourage banks to collaborate with RBIH to refine and adopt the MuleHunter.AI model,” Das said.
Use of Money Mule accounts is a common method adopted by fraudsters to channel the proceeds of frauds, RBI said.
(The story has been updated with additional information)
