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Reserve Bank of India model-risk draft guidance
RBI released draft Guidance on Regulatory Principles for Model Risk Management for public comment through July 24, 2026. It applies across banks, NBFCs, asset reconstruction companies, credit information companies, and other regulated financial entities, and explicitly covers all models, including third-party models and AI/ML systems.
RBI released draft Guidance on Regulatory Principles for Model Risk Management for public comment through July 24, 2026.
Why it matters
RBI frames weak model governance as a source of financial, operational, compliance, and reputational risk; Reuters reports that the draft expects board-approved model-risk frameworks, independent validation, ongoing risk assessment, corrective actions such as limiting or decommissioning models, human oversight for automated decisions, and extra cybersecurity controls for customer-facing generative AI.
Primary trail
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