RBI guv asks banks to build human oversight, says blaming technology is 'unacceptable'
The Reserve Bank of India governor has warned banks that they must maintain human oversight over AI systems. He emphasized that banks cannot blame algorithms or vendors for decision-making errors, as ultimate accountability must remain with human staff.
Why it matters
As financial institutions increasingly adopt AI for credit and customer service, establishing clear regulatory frameworks for accountability is critical to preventing systemic risks.
Banks must ensure that humans remain accountable for decisions made with the help of artificial intelligence, Reserve Bank governor Sanjay Malhotra said on Tuesday, warning lenders against treating algorithms or technology vendors as responsible for their actions.Speaking at the annual Fibac event in the financial capital, Malhotra said banks adopting AI must ensure that the technology supports human judgement rather than simply replacing it. He also asked lenders to build "meaningful human oversight" into AI systems from the design stage itself."For a bank's decision, the ultimate responsibility has to lie with the bank and not with the vendor or with the algorithm. We cannot say that it is the model who decided it.
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