# Draft Guidance on Regulatory Principles for Model Risk Management, 2026

- **Jurisdiction:** India (IN)
- **Type:** Guideline · **Status:** In consultation · **Binding:** yes
- **Issued by:** Reserve Bank of India (RBI)
- **Proposed:** 24 Jun 2026 · **Adopted:** — · **Effective:** —
- **Obligations:** Risk classification, Human oversight, Bias and non-discrimination, Transparency to users, Security testing, Data governance
- **Sectors:** Finance

## Summary
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.

## Source
[Reserve Bank of India](https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=63006) · [secondary](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
Draft Guidance on Regulatory Principles for Model Risk Management, 2026.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).

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Canonical page: https://wheresthe.ai/rule/in-rbi-model-risk-management-guidance-draft-2026/ · Not legal advice.