Artificial Intelligence (AI) is no longer a futuristic concept, it is here, influencing how we live, work, and increasingly, how we manage our money. Recognising both the immense potential and inherent risks of this powerful technology, the Reserve Bank of India’s FinTech Department recently released the FREE AI Report, a framework inspired by India’s core principles of “Dharma” and “Karma” ie. Responsible and Ethical Enablement of Artificial Intelligence.
This document sets out how India plans to balance innovation with responsibility, ensuring that AI strengthens its financial sector while protecting the interests of customers, businesses, and the economy at large.
As someone who has worked in international banking for over two decades, I see this as a critical step forward, not only for India, but for the global financial community that increasingly looks to India for regulatory and technological leadership.
What is the FREE AI Report?
The FREE AI Report is the Reserve Bank of India’s attempt to create a structured framework for the ethical, safe, and inclusive use of AI in India’s financial sector. Its central message is clear: while AI can unlock tremendous benefits, ranging from hyper personalised banking to advanced fraud detection, it must be deployed in a way that is transparent, accountable, and aligned with the principles of fairness and equity.
The report identifies four key pillars:
1. Responsibility: Financial institutions and fintechs must remain accountable for the outcomes of AI systems. AI should never become a “black box” that excuses poor decision-making.
2. Ethics: AI must align with values of fairness, avoiding bias and discrimination in lending, onboarding, or risk assessment.
3. Enablement: Regulators and institutions should work together to encourage safe experimentation, so that innovation is not stifled.
4. Transparency: Customers must have clarity on how AI-driven decisions are made, especially when it impacts their credit, payments, or financial security.
Together, these principles form the backbone of what RBI calls a balanced, forward looking approach to governing AI in finance.
Why Does India Need This Framework?
India has one of the world’s most dynamic and diverse financial ecosystems. With a young population, widespread digital adoption, and platforms like UPI and Aadhaar, the country is already a global leader in financial innovation.
But this scale also creates risks. AI systems trained on biased or incomplete data can exclude vulnerable groups from credit. Automated fraud-detection tools, if opaque, can cause genuine transactions to be blocked without recourse. And without clear guardrails, institutions may adopt AI in ways that undermine consumer trust. The FREE AI framework acknowledges these challenges and sets out guiding principles to ensure that AI serves the people, not the other way around.
Key Recommendations of the FREE AI Report
The RBI report does more than state principles, it offers practical recommendations for implementation.
• Governance Structures: Banks and fintechs should establish internal AI governance committees to monitor ethical deployment.
• Bias Testing: Institutions must routinely audit AI models to check for bias in lending, recruitment, or fraud detection.
• Explainability: AI systems should be designed with “explainable AI” features, allowing both regulators and customers to understand how decisions are made. • Accountability: Responsibility for AI outcomes should rest with the financial institution, not outsourced vendors or algorithms.
• Consumer Protection: Customers should have access to grievance redressal mechanisms when affected by AI-driven decisions.
• Capacity Building: Regulators and institutions must invest in skills, knowledge, and infrastructure to manage AI responsibly.
Together, these measures create a framework where innovation can flourish without compromising trust or fairness.
Implications for Global Finance and the Diaspora
India’s approach to AI regulation has significance well beyond its borders. In a world where regulators are struggling to keep pace with technological change, the RBI’s framework provides a model of proactive, principle-based governance. For the Indian diaspora in the UK and the wider Non-Resident Indian (NRI) community, this matters deeply. Many depend on fintech platforms to send money home, invest in Indian markets, or manage cross-border accounts. The FREE AI framework ensures that these platforms, whether Indian or global, operate with integrity and fairness, giving NRI customers greater confidence.
As fintech firms like Ribbon build bridges between the UK and India, such regulatory clarity makes it easier to design products that meet both customer needs and compliance standards.
A Personal Perspective
Having worked for over 20 years in international banking, including leadership roles at ICICI Bank, and now as Co-founder & CEO of Ribbon PLC, I have seen how regulation shapes innovation. Ribbon, licensed as an Electronic Money Institution, is focused on
empowering NRIs with multi-currency accounts, low-cost remittances, and access to India’s financial ecosystem. Frameworks like FREE AI provide invaluable certainty to institutions, confidence to customers, and credibility to the ecosystem. Most importantly, they allow fintechs to innovate with purpose, not chasing technology for its own sake, but using it to solve real human problems responsibly.
Looking Ahead
The FREE AI Report represents a leadership moment for India. At a time when global regulators are still debating how to govern AI, the RBI has taken decisive action, not by restricting innovation, but by shaping it with India’s core values of Dharma and Karma, ie. responsibility, ethics, enablement, and transparency.
This is the kind of forward-looking framework that will not only strengthen India’s financial sector but also inspire global standards. For the NRI community in the UK and beyond, it signals that the platforms they rely on to stay connected with India are being built on strong, ethical foundations.
Artificial Intelligence will undoubtedly define the next chapter of global finance. But its success will depend not only on algorithms, data, or computing power, it will depend on the wisdom of the frameworks that guide its use. With FREE AI, India has shown that it is ready to lead that journey.
Ashesh Jani is the Co-founder & CEO of Ribbon PLC, a licensed fintech with AI-driven financial solutions for the Indian diaspora
