Finance did not wait for the national framework; it wrote the first draft of it. Three months before MeitY published its sutras, the Reserve Bank of India released its committee’s report on a Framework for Responsible and Ethical Enablement of Artificial Intelligence ~ the FREE-AI report, submitted on 13 August 2025 ~ setting out seven guiding sutras, twenty-six recommendations and six pillars: infrastructure, policy, capacity, governance, protection and assurance.

Those seven sutras are, in substance, the seven that MeitY would adopt for the nation in November. The finance regulator drew the thread first, and the country took it up; for the practitioner, that lineage is not trivia but a signal ~ the sutras reach finance already load-bearing, road-tested in the economy’s most regulated corner before being applied to the whole. Begin by mapping each task to the principle it most engages. AI-driven lending answers above all to Fairness and Equity: the danger is not merely a bad loan but a discriminatory one, bias laundered through a training set and reproduced at scale. Algorithmic and AI-assisted trading answers to Understandable by Design: a strategy no one can explain is a strategy no one can supervise.

AI-generated ESG ratings turn on Accountability: when a score moves capital, someone must own the judgement the machine appears to have made. And AI-assisted audit commentary engages Accountability and understandability at once – the auditor who leans on a model still signs the opinion. The cost of getting this wrong is not hypothetical. In an interim order of July 2025, SEBI impounded Rs 4,843.57 crore in alleged unlawful gains from a US-based trading group accused of manipulating the Bank Nifty on derivative-expiry days ~ buying index constituents through the morning to lift the index, then reversing in the afternoon to profit from far larger options positions. The case vindicated the traceability architecture the regulator had already built.

Its circular of 4 February 2025 requires every algorithmic strategy to be registered with the exchange and tagged with a unique Algo ID before it goes live, mandatory across the board from 1 April 2026, and it splits algorithms into disclosed........

© The Statesman