RBI drafts model risk rules covering AI/ML for all regulated lenders

The Reserve Bank of India issued draft Guidance on Regulatory Principles for Model Risk Management for banks, co-operative banks, NBFCs, all-India financial institutions, ARCs and credit bureaus, explicitly covering third-party and AI/ML models across their lifecycle; comments were due 24 July 2026. Practitioner analyses highlight board-approved model risk frameworks, independent validation of vendor models, explainability and fairness testing for credit models, and kill-switch and disclosure duties for customer-facing AI.