Deputy governor Murmu asks banks to stress-test AI systems before deployment

Mumbai: Deputy Governor Shirish Chandra Murmu of the Reserve Bank of India urged banks to stress-test AI systems before deployment and conduct regular reviews, as part of efforts to anticipate and contain cyber fraud, emerging risks, and ensure consumer protection and market integrity. Murmu outlined five principles for banking in the AI era, including clear human accountability for automated decisions and maintaining an inventory of all AI systems used by banks, including those embedded in vendor products.

He emphasized that if a bank cannot identify the person responsible for an AI model, it has not truly deployed the model. Every bank should maintain a current inventory of all models and AI systems in use. Murmu also stressed that customers should be informed when they are interacting with an automated system, especially when decisions materially affect them.

He cautioned banks against solely focusing on cost savings when adopting AI, as it could lead to automated systems without improved customer experience. Murmu warned that treating "we don't know" as meaning "we know it's bad" could result in unnecessary credit denials. He also warned about the collective risks posed by common data, models, vendors, and infrastructure, highlighting MuleHunter.ai and the Digital Payments Intelligence Platform as the central bank's response.