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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Draft Guidance on Regulatory Principles for Model Risk Management, 2026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 and addresses 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

WTA-R-IN-0008: Draft Guidance on Regulatory Principles for Model Risk Management, 2026. Reserve Bank of India. wheresthe.ai, https://wheresthe.ai/rule/in-rbi-model-risk-management-guidance-draft-2026/ (checked 4 Oct 2026).

History

  • Summary changed from …report, addressing… to …report and addresses…

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