RBI plans to use AI to improve regulatory supervision

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.

It undertakes continuous supervision of such entities with the help of on-site inspections and off-site monitoring.

The central bank has floated an expression of interest (EoI) for engaging consultants in the use of Advanced Analytics, Artificial Intelligence and Machine Learning for generating supervisory inputs.