Overview
- Deputy Governor Rohit Jain told Global Fintech Fest on Wednesday that banks and regulated firms remain fully responsible for decisions made by algorithms even when computation is run by third-party vendors.
- Jain flagged three technology-amplified risks—speed, concentration, and opacity—explaining that automation can make errors travel faster, affect more firms at once, and be harder to explain or detect.
- He warned that reliance on a small number of cloud, vendor and model providers could turn a single provider failure or flaw into a system-wide disruption rather than an isolated bank problem.
- The RBI said regulation should be proportional to the harm a use case can cause, with stronger governance for systems that approve credit or execute transactions and lighter expectations for low-risk tools.
- The remarks build on the RBI’s FREE-AI work and point to near-term priorities for the central bank such as evolving supervisory tools including DAKSH, PRAVAAH and the Digital Payments Intelligence Platform to detect and contain tech-driven failures.