The RBI also said banks should ensure all models, including third-party models, are subject to independent validation. | Photo Credit: FRANCIS MASCARENHAS

Reserve Bank of India (RBI) has proposed ​rules requiring banks to strengthen ‌oversight of risks tied to AI ​and machine-learning models, ⁠mandating board-approved policies, stronger controls and model inventories.

RBI ‌said banks must put in place a board-approved risk ‌management framework covering all ‌models, including ⁠those for AI and ⁠machine-learning.

Regulated entities must assess risk at both the individual model level and ​across the ‌enterprise on an ongoing basis, the RBI said.

If risks are found to be excessive, lenders ‌should take timely corrective steps, including ​enhanced controls, restrictions on use, remediation or decommissioning ⁠of the model, and submit a report to the board’s risk ‌management committee, the bank added.

The RBI also said banks should ensure all models, including third-party models, are subject to independent validation.

Banks should establish human ‌oversight for AI models used in automated ​decision-making, the draft guidelines said. For generative AI models ⁠that interface with customers or ⁠external users, additional cybersecurity controls should be implemented.

RBI has ‌invited feedback on the draft guidelines by July 24.

Published on June 24, 2026