India’s financial regulators are moving from observing AI innovation to actively orchestrating it with strong guardrails for fairness, transparency, and accountability.
Grant Thornton Bharat’s latest report, “Guardrails for AI,” explores how India’s financial regulators are laying the groundwork for responsible, transparent, and ethical AI adoption across the financial ecosystem. With the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) leading this transformation, the report marks a pivotal moment in India’s journey from AI experimentation to structured governance.
RBI’s Framework for Responsible and Ethical Enablement of AI (FREE-AI) sets guiding principles for safe, fair, and explainable AI in financial services, calling for board-level accountability, standardized policies, and risk management frameworks. SEBI’s consultation paper complements this by emphasizing transparency and fairness in capital markets, mandating model documentation, investor disclosures, and explainability for AI-led decisions.
The report highlights four major barriers to AI maturity: data quality, infrastructure gaps, talent shortages, and regulatory ambiguity, while outlining government efforts like the IndiaAI Mission, AI Kosh, and IndiaAI Compute Platform to democratise access and bridge these divides.
For banks, insurers, NBFCs, and fintechs, AI is evolving from a technology initiative to a governance imperative. The emphasis now lies on explainability, fairness, and consumer protection. The report concludes that as India shifts from observing innovation to orchestrating it, the true differentiator for financial institutions will be trust built through transparent, auditable, and responsible AI systems