The Reserve Bank of India is collaborating with international advisory firms to enhance regulatory oversight over banks and NBFCs. According to reports, the central bank has selected McKinsey and Company India LLP and Accenture Solutions Pvt Ltd India to create systems that employ artificial intelligence and machine learning for supervisory purposes.
In September of last year, the RBI had solicited proposals for recruiting consultants who would utilize advanced analytics, artificial intelligence, and machine learning to produce supervisory inputs. Following the initial announcement, seven applicants were chosen to participate in the request for proposal process.
The contract, which is worth around 91 crore, has been awarded to McKinsey and Company India LLP and Accenture Solutions Private Limited India, as stated in the Reserve Bank document.
The RBI is already incorporating AI and ML into its supervisory processes, but it intends to enhance it to capitalize on the benefits of advanced analytics. The EoI released in September disclosed that the Department of Supervision has been developing and using linear and machine-learnt models for supervisories. It will now analyze the data to identify its attributes that can be used to create new and better supervisorier inputs.
With the growing AI trend, numerous regulatory and supervisory bodies have begun to leverage machine learning to enhance their work, with real-time data reporting, data management, and dissemination capabilities facilitated by AI and ML technologies.
Indirectly, the RBI has control over banks, urban cooperative banks (aka “urban cooperative” banks), NBFCs, payment bank operations, small finance banks accounts, local area banks and credit information companies, as well as select Indian financial institutions.
(With the assistance of agencies)