Waiting for an AI law is a poor compliance strategy
India's courts and sectoral regulators have already begun assigning liability for AI failures. Businesses that are holding out for a statute are preparing for the wrong deadline.
Waiting for a specific AI law to comply with regulations is a poor strategy for businesses. A bank faced court challenges when its AI system wrongly froze an account, leaving no clear record of what the human reviewer had actually assessed. Despite court rulings, the bank still had to pay for the mistake, highlighting the need for proper oversight.
Regulators, like the RBI, are proactive and have set deadlines for banks to assess AI cyber risks. India's AI law is in progress, with a consultation paper expected soon, but businesses should not wait for a law to implement oversight measures. Compliance requires demonstrating the full process of AI decisions, including which model produced the output, what data it used, and who reviewed it.
Companies must ensure their systems can answer these questions, regardless of future legislation. Proactively recording model versions, prompts, retrieved data, and human sign-offs for AI decisions is crucial. This planning is essential, as waiting for a law to arrive may be too late.
Written by urgent.news from YourStory's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
