Mumbai, June 26 -- In a landmark draft, the Reserve Bank of India (RBI) has proposed a framework for financial institutions to develop, deploy, adopt, and manage technology models, including those that use artificial intelligence (AI) and machine learning (ML). The overarching guidelines propose stricter board-led policies on the usage of such technologies and strengthened controls and human oversight for such models, including a 'kill switch' to override any active model.

A model is any system, built in-house or bought from a vendor, that uses data and statistical, mathematical, financial, or other reasoning techniques, including AI/ML, to make decisions.

"This guidance marks a structural turning point in how AI will be governed within...