The Reserve Bank of India plans to work with global consultancy firms in order to improve regulatory supervision over banks and NBFCs. The central bank has reportedly selected McKinsey and Company India LLP and Accenture Solutions Pvt Ltd India to develop systems that use artificial intelligence and machine learning for supervisory functions.
Earlier in September last year, the RBI had invited expressions of interest for engaging consultants who would use advanced analytics, artificial intelligence and machine learning to generate supervisory inputs. Following the initial announcement it had selected seven of the applicants to participate in the request for proposal process.
As per a Reserve Bank document the contract – worth about ₹91 crore – has been awarded to McKinsey and Company India LLP and Accenture Solutions Private Limited India.
While the RBI is already using AI and ML in supervisory processes, it now intends to upscale it to ensure that the benefits of advanced analytics. The EoI issued in September said that the Department of Supervision has already been developing and using linear and a few machine-learnt models for supervisory examinations. It will now explore the data to identify its attributes that can be leveraged to generate new and improved supervisory inputs.
As the AI wave gains momentum, many regulatory and supervisory authorities have begun using machine learning techniques in order to elevate their work. AI and ML technologies can be used for real-time data reporting, effective data management and dissemination.
The supervisory jurisdiction of the RBI incidentally extends over banks, urban cooperative banks, NBFCs, payment banks, small finance banks, local area banks, credit information companies and select all Indian financial institutions.