Rules / India

Draft Guidance on Regulatory Principles for Model Risk Management, 2026

In consultationGuidelineBinding

Draft RBI guidance covering governance of all models, including AI/ML and generative AI, used by commercial and co-operative banks, NBFCs, all-India financial institutions, ARCs and credit information companies. It builds on the 2024 draft on credit-model risk and the FREE-AI report, addressing explainability, bias, drift, hallucination, human oversight and customer disclosure of AI use.

Why it matters

Banks and NBFCs should expect board-level model inventories, validation and AI-specific controls to become supervisory requirements once this is finalised.

What it requires

Risk classificationHuman oversightBias and non-discriminationTransparency to usersSecurity testingData governance
SourceReserve Bank of India: https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=63006Secondary: https://www.corplawupdates.in/updates/rbi-draft-guidance-model-risk-management-2026-ai-ml-banks-nbfcs Checked against the source on 4 Oct 2026. Comments were due 24 Jul 2026. No final version found as of 4 Oct 2026. AI-specific control details (kill switch, red-teaming, hallucination) taken from secondary summaries.

Cite this record

Draft Guidance on Regulatory Principles for Model Risk Management, 2026. Reserve Bank of India (RBI). Status: In consultation. wheresthe.ai, https://wheresthe.ai/rule/in-rbi-model-risk-management-guidance-draft-2026/ (verified 4 Oct 2026).

Line of Thought

Developments connected to this rule

What has happened that this rule shapes, or that shapes it. Pick one to keep following the thread.

More from India