Reserve Bank of India (RBI) Governor Sanjay Malhotra said the central bank will provide banks with a Digital Payment Intelligence Platform to work with them on tackling fraud in the digital payments ecosystem. Malhotra said the RBI would provide the platform to financial institutions as artificial intelligence (AI) and machine learning become important in identifying fraud. The Governor urged banks to assess where they stand in their adoption of AI and build appropriate governance structures around its use.

The Governor said that smaller banks may not have their own AI models and would therefore have to depend on vendors. This, he said, makes data protection and governance particularly important.

Malhotra also stressed that human judgement and accountability would remain important even as banks deploy increasingly sophisticated AI models.

“No matter how sophisticated model you build, for a bank decision, the ultimate decision has to be of bank and for that human oversight will remain important,” he said.

He urged financial institutions to treat AI governance as a priority. Banks should maintain a complete inventory of the AI models they use, have a board-approved AI governance policy and put in place red-team and stress-testing capabilities, he said.

Malhotra said the RBI had made progress over the past year on customer centricity, ease of doing business and reducing the cost of intermediation.