RBI plans to extensively use AI, ML to improve regulatory supervision

The Reserve Bank is planning to extensively use advanced analytics, artificial intelligence and machine learning to analyse its huge database and improve regulatory supervision on banks and NBFCs.

For this purpose, the central bank is also looking to hire external experts.

While the RBI is already using AI and ML in supervisory processes, it now intends to upscale it to ensure that the benefits of advanced analytics can accrue to the Department of Supervision in the central bank. The department has been developing and using linear and a few machine-learnt models for supervisory examinations.

The supervisory jurisdiction of the RBI extends over banks, urban cooperative banks (UCB), NBFCs, payment banks, small finance banks, local area banks, credit information companies and select all India financial institutions.