“An institution may outsource the computation, but it cannot outsource the consequence,” said Rohit Jain, Deputy Governor, Reserve Bank of India, in a keynote address at Global Fintech Fest (GFF) 2026, on why banks and other regulated entities cannot shift responsibility for algorithm or AI decisions onto the vendors or developers that build or supply the underlying models.
AI complexity cannot excuse a lack of accountability: Jain further said that the growing sophistication, complexity or unexplainability of AI models does not lower the bar for institutions to answer for the decisions those models make.
“Advanced models can identify relationships and arrive at decisions in ways that may be difficult to explain. Greater sophistication, however, cannot mean weaker accountability. An institution may outsource the computation, but it cannot outsource the consequence,” – Rohit Jain
Don’t regulate all models and tools in the same way: “The second element is proportionality. Different uses of the same technology can present very different risks. A tool used to summarise an internal document cannot be treated in the same way as a system that autonomously approves credit or executes financial transactions. The greater the consequence of the use case, the stronger the expectations should be around governance, validation, oversight and intervention,” Jain said.
Affected customers need more than an excuse: “A customer affected by an important financial decision deserves something more meaningful than being told that the ‘model said so’,” Jain said.
On outsourcing to third-party AI vendors: Jain said neither an institution’s fairness obligations to customers nor its responsibility for risk changes when a third party supplies the technology.
“The obligation to treat customers fairly does not change because an algorithm influences the decision. Similarly, responsibility for managing risk does not disappear because a model or technology is supplied by a third party,” – Rohit Jain
RBI’s recommendations for responsible AI: In August 2025, the Reserve Bank of India’s (RBI) FREE-AI Committee outlined recommendations for responsible AI integration in the financial sector. Read more about it here.
Recommended read: Can customers demand explainability for AI-based financial decisions?
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