Regulatory feed · Q1 2026
Framework for Responsible and Ethical Enablement of AI in Financial Services (FREE-AI)
RBI's master framework governing AI use in scheduled banks, NBFCs, and fintech partners. Establishes board-level governance, bias testing, explainability, audit-log retention, grievance redressal, and cross-border data flow controls. Binding for all entities with customer-facing AI by Apr 10, 2026.
What it covers
The FREE-AI Report is RBI's first comprehensive framework for AI deployment in regulated financial services. It lands on five pillars: governance, accountability, risk, fairness, and transparency.
Who it applies to
- All scheduled commercial banks, small finance banks, payments banks, and co-operative banks
- NBFCs with AUM above ₹500 crore, and all NBFC-account aggregators
- Third-party fintech partners processing customer data on behalf of regulated entities
Key obligations (summary)
- Board-approved AI governance framework, reviewed every 6 months
- Designated AI Officer at senior management level, reporting to the Audit Committee
- Bias testing on all customer-facing models, every 6 months, documented
- Audit log retention of 7 years for all AI-driven decisions with financial impact
- Customer-facing labeling wherever AI materially influences the outcome
- Grievance redressal within 30 days for AI-influenced decisions
- Incident reporting to RBI within 24 hours for material AI failures
Classification
Next steps
Obligations · all regulations
| Obligation | Source | Control | Evidence | Deadline | Status |
|---|
Approvals · CCO queue
Regulator corpus
Reserve Bank of India · RBI
Master directions, circulars, notifications across scheduled banks, NBFCs, and payment systems.
1,247 circulars · last ingest 9m agoTelecom Regulatory Authority · TRAI
Consumer protection, unsolicited commercial communication, data localization.
312 notifications · last ingest 2h agoSEBI
Digital lending disclosure, market conduct, fintech partnership rules.
89 circulars · last ingest 14h agoBureau of Indian Standards · BIS
Open banking API standards, data exchange formats.
41 standards · last ingest Apr 15Ministry of Home Affairs · MHA
KYC, anti-money laundering, cybersecurity advisories.
On deck · Q2 ingestCERT-In
Cyber incident reporting requirements and advisories.
On deck · Q2 ingest