Govt & RBI Encourage Responsible AI Adoption In Financial Sector For Msmes: Mos Karandlaje

(MENAFN- KNN India) New Delhi, Dec 16 (KNN) The Minister of State for Micro, Small and Medium Enterprises (MSMEs) Shobha Karandlaje on Monday said that the government and the Reserve Bank of India (RBI) are promoting the responsible and ethical use of artificial intelligence (AI) in the financial sector to improve access to credit for MSMEs, while ensuring transparency, fairness, and regulatory oversight.

Replying to a question in the Rajya Sabha, Minister of State for MSMEs Shobha Karandlaje acknowledged the growing adoption of AI-driven tools by scheduled commercial banks for credit appraisal, noting that such technologies are being encouraged as enablers of faster processing, improved risk assessment, and greater financial inclusion, particularly for small borrowers.

Responsible AI Framework and Regulatory Oversight

The Minister said the Government and the RBI are guiding financial institutions to adopt AI in a responsible manner. Initiatives under Digital India, including AI-enabled dashboards and monitoring tools, aim to strengthen credit delivery to MSMEs.

Platforms such as PSB Loans in 59 Minutes use data analytics and AI to expedite loan approvals and enhance transparency. She added that AI adoption in lending is aligned with the Digital Personal Data Protection (DPDP) Act, 2023, to ensure data safety and borrower protection.

The RBI has also constituted a committee to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI), with the objective of promoting trust, accountability and fairness in the use of automated systems in the financial sector.

Loan Disbursements Under Key MSME Schemes

Providing scheme-wise data, the Minister said that under the PM Vishwakarma Scheme, about 30 lakh beneficiaries have been registered so far, with 5.24 lakh loans amounting to Rs 4,517.8 crore sanctioned, including to beneficiaries from SC, ST, OBC and minority communities.

Under the Pradhan Mantri MUDRA Yojana, a cumulative 53.31 crore loans worth Rs 33.63 lakh crore have been disbursed between FY2015–16 and FY2024–25, covering borrowers from socially disadvantaged groups as well.

(KNN Bureau)

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