RBI: Banks cannot outsource accountability for algorithmic decisions
Reserve Bank of India Deputy Governor Rohit Jain stated that banks cannot shift responsibility for AI-driven decisions to vendors. Accountability remains despite model complexity.
The Reserve Bank of India (RBI) has clarified that banks and other regulated entities cannot outsource accountability for decisions made by algorithms or artificial intelligence (AI) to third-party vendors.
"An institution may outsource the computation, but it cannot outsource the consequence," said RBI Deputy Governor Rohit Jain at the Global Fintech Fest 2026. He emphasized that the increasing sophistication or unexplainability of AI models does not diminish an institution's responsibility to answer for the decisions those models make.
Jain also noted that the use of different AI tools should be treated proportionally. A tool used to summarize an internal document should not be treated the same way as a system that autonomously approves credit or executes financial transactions. As the consequences of a use case increase, so too should the expectations for governance, validation, oversight, and intervention.
Customers affected by significant financial decisions deserve more than to be told that the "model said so." The obligation to treat customers fairly or manage risk does not change because an algorithm influences a decision or the technology is supplied by a third party, according to Jain.