This report presents a rigorous analysis of the Reserve Bank of India’s Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI), constituted in December 2024 and released in August 2025. Conceived to balance innovation with prudent risk management, the framework advances seven guiding sutras and twenty-six recommendations across six pillars—Infrastructure, Policy, Capacity, Governance, Protection, and Assurance. Together, these principles seek to safeguard consumer interests, strengthen institutional resilience, and ensure that the transformative potential of AI in financial services is realised responsibly.
The study offers:
- Comparative Perspective: An examination of global regulatory approaches, including the Monetary Authority of Singapore, the European Union’s AI Act, the United Kingdom’s Financial Conduct Authority, the Banco Central do Brasil, and the Bank for International Settlements.
- Analysis of Recommendations: An in-depth review of RBI’s proposals on capacity building, board-approved AI policies, governance of data and AI systems, consumer protection, product approval mechanisms, and sector-wide risk intelligence frameworks.
- Implications for India: A mapping of these recommendations against the objectives of the IndiaAI Mission, outlining operational imperatives for banks, NBFCs, fintechs, and self-regulatory organisations.
- Future Outlook: Strategic reflections on embedding trustworthy AI within India’s financial ecosystem while fostering innovation, transparency, and equity at scale.
Objective
The publication seeks to inform policymakers, regulated entities, and industry stakeholders on aligning institutional practices with global best standards while advancing India’s ambition to become a global leader in responsible AI.
