From AI to Oversight: RBI’s Bold Move That Could Reshape Indian Banking!

The Reserve Bank of India (RBI) is set to collaborate with leading international consultancy firms to bolster its regulatory vigilance across banks and NBFCs. McKinsey & Company India LLP and Accenture Solutions Pvt Ltd India have been identified by the RBI to spearhead the integration of artificial intelligence (AI) and machine learning (ML) into supervisory frameworks.

Last September, the RBI reached out for expertise in harnessing AI, ML, and cutting-edge analytics to refine supervisory methodologies. From the expressions of interest received, seven prominent consultancies were shortlisted to present detailed proposals. After rigorous assessments, McKinsey and Accenture Solutions emerged as the preferred partners, securing a contract valued at approximately ₹91 crore.

While the RBI has previously dabbled in AI and ML for certain supervisory tasks, there’s a renewed focus on leveraging these technologies to their full potential. Internal RBI reports highlight that their Department of Supervision has been testing and applying both linear models and a handful of machine-based algorithms. The intent moving forward is to unearth more sophisticated insights from data and further enhance supervisory techniques.

With AI reshaping global sectors, various regulatory entities are turning to machine learning solutions to elevate their operational capabilities. Such next-gen tools are invaluable for instantaneous data analysis, streamlined data handling, and broad-spectrum dissemination. The RBI’s supervisory scope, notably, extends to a diverse range of financial institutions, from traditional banks to credit information firms and selected financial entities within India.