RBI governor tells Indian banks to control AI

The Reserve Bank of India (RBI) is signaling a major shift in how lenders must approach Artificial Intelligence. The central bank is warning that banks and financial institutions must take the driver’s seat in AI adoption rather than letting the technology dictate business terms. For retailers and operators, this means the 'black box' era of automated credit decisions is coming to an end. Regulators are increasingly concerned about hidden biases in AI models that decide which of your customers get approved for financing and which get rejected. This push for control will likely lead to more transparency requirements for lenders. If you offer financing at the point of sale, you should expect your lending partners to become more cautious—but also more deliberate—about how they use AI to score applicants. The goal is to prevent 'systemic risks' where an algorithm makes a mistake that ripples through the entire market. For your business, this translates to more stable, predictable lending platforms. However, it may also mean that the rapid, instant-approval speeds we’ve seen recently might face more oversight to ensure those decisions are fair and accurate.

Source: Finextra — Lending

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