Committee formed for ethical use of AI

Why in news?

• RBI has formed an eight-member committee for responsible and ethical use of AI in the financial sector.
• The chairman of this committee is Professor Pushpak Bhattacharya.
  • He is a professor in the Department of Computer Science and Engineering at IIT Mumbai.

Functions of the committee:

• It will assess the current level of acceptance of AI in financial services at the global and domestic level.
• It will also review the regulatory and supervisory approach to AI, focusing on the financial sector at the global level.
• This committee will also identify the potential risks associated with AI.
• It will recommend assessment, settlement, monitoring framework and compliance points for AI-related risks for banks, non-banking financial companies (NBFCs), financial-technology firms.

About AI:

• AI (Artificial Intelligence) is a field where computers are given the ability to think and learn like humans.
• These computers or machines analyse data, recognize patterns, make decisions and can even do creative work.

Reserve Bank of India (RBI):

• It is the central bank of India, established on 1 April 1935.
• Its main objectives:
  • To control the monetary policy of the country
  • To control inflation
• To maintain financial stability
  • Its main functions:
  • Monitoring Indian banks
  • Managing the Indian currency (rupee)
  • Determination of interest rates for banks
    • This affects economic growth and inflation
  • Managing foreign exchange reserves
  • Managing government bonds
  • Stability of the overall financial system of the country
  • Stability in the banking system; etc.