On June 24, 2026, the Reserve Bank of India released its draft Guidance on Regulatory Principles for Model Risk Management, 2026, marking the first comprehensive regulatory framework governing how banks, NBFCs, and other regulated financial entities must manage risks arising from the use of models — including AI-ML systems. The draft sets out principles covering board-level governance, risk-based model tiering, lifecycle management, explainability and human oversight requirements for AI models, third-party vendor accountability, and mandatory customer disclosures when AI drives financial decisions. The draft is open for public consultation until July 24, 2026.