Current Affairs · Banking and Economy

Statement: Artificial Intelligence (AI) is increasingly transforming financial services, particularly in fraud detection and credit underwriting. However, in the absence of proper guidelines, AI may also amplify risks in the financial system. To address this, the Reserve Bank of India (RBI) constituted a committee to develop the Framework for Responsible and Ethical Enablement of AI (FREE-AI). The framework aims to strike a balance between fostering innovation and ensuring trust, fairness, and stability in the financial sector. Which of the given statements can be logically inferred from the passage above? I. RBI recognizes both the potential benefits and risks of AI in financial services. II. The FREE-AI framework will completely eliminate all risks associated with AI in the financial sector. III. Innovation in financial technology is a priority for RBI, provided it aligns with fairness and stability. IV. RBI has banned the use of AI in financial services until the FREE-AI framework is fully implemented.