The Reserve Bank of India (RBI) on Wednesday proposed a new framework for the use of artificial intelligence as its adoption by domestic banks expand significantly. In a draft circular, the RBI urged banks to put in place proper governance, risk management, and controls, along with continuous oversight. Under the new framework, the regulator proposed broad principles to manage risks from third-party models. The regulator has sought stakeholder feedback by July 24. “Considering model usage has expanded significantly and regulated entities are increasingly using models, including those employing artificial intelligence / machine learning, across various business and decision-making processes; weaknesses in their governance, oversight, risk management and controls may expose the regulated entities to financial, operational, compliance, and reputational risks,” the regulator said in a draft circular.