Reserve Bank of India model-risk draft guidance

RBI released draft Guidance on Regulatory Principles for Model Risk Management for public comment through July 24, 2026.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.

Analysis byAIImpactLab Editorial Desk

PublishedJune 24, 2026

Reading time2 minutes

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

Go to the source

Read the evidence behind this analysis. External links open in a new tab.

Reuters via CNA

Why it matters

Go to the source

Related impact

Cash et al., “Is AI making us stupid?”

Sungu, Lira and Duckworth, “Generative AI Can Harm Teaching”

European Commission, “Guidelines on transparency obligations for providers and deployers of AI systems”