New Delhi, Dec 16 (KNN) — The Minister of State for Micro, Small and Medium Enterprises (MSMEs), Shobha Karandlaje, announced on Monday that the Indian government, in collaboration with the Reserve Bank of India (RBI), is actively promoting the responsible and ethical use of artificial intelligence (AI) within the financial sector. This initiative aims to enhance access to credit for MSMEs while ensuring transparency, fairness, and necessary regulatory oversight.
Speaking in the Rajya Sabha, Karandlaje highlighted the increasing utilization of AI-driven tools by scheduled commercial banks for credit appraisal. She noted that these technologies are playing a pivotal role in facilitating faster processing, refining risk assessments, and fostering greater financial inclusion, particularly benefiting smaller borrowers.
The Minister emphasized the importance of a responsible AI framework and regulatory oversight as essential components of this initiative. She stated that the government and the RBI are guiding financial institutions to implement AI responsibly. Under the Digital India initiative, several AI-enabled dashboards and monitoring tools are being developed to bolster credit delivery to MSMEs.
One notable example is the PSB Loans in 59 Minutes platform, which employs data analytics and AI to streamline loan approvals and improve transparency in the lending process. Karandlaje also mentioned that the adoption of AI in lending practices is in alignment with the Digital Personal Data Protection (DPDP) Act, 2023, ensuring data safety and borrower protection.
In a bid to further establish trust and accountability in the use of automated systems within the financial sector, the RBI has set up a committee tasked with developing a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI).
On the subject of financial support for MSMEs, the Minister provided detailed statistics regarding loan disbursements through various government schemes. Under the PM Vishwakarma Scheme, approximately 30 lakh beneficiaries have registered, with 5.24 lakh loans sanctioned, totaling Rs 4,517.8 crore, including recipients from Scheduled Castes (SC), Scheduled Tribes (ST), Other Backward Classes (OBC), and minority communities.
Furthermore, under the Pradhan Mantri MUDRA Yojana, a cumulative total of 53.31 crore loans, amounting to Rs 33.63 lakh crore, have been disbursed from FY2015–16 to FY2024–25, significantly benefiting borrowers from socially disadvantaged groups.
This strategic focus on AI and financial inclusion underscores the government’s commitment to enhancing access to financial resources for MSMEs, which form a crucial part of the Indian economy. As AI technologies continue to evolve, their integration into the financial sector is likely to reshape lending practices, making them more efficient and equitable while also addressing the unique challenges faced by smaller entities.
See also
Gene Simmons Calls for Federal AI Regulations to Protect Music Industry Integrity
Counties Leverage AI Innovations to Enhance Services and Build Public Trust at MACoCon
Government Must Shift Focus from AI Vanity Metrics to Impactful Performance Metrics
New Zealand Announces $70M AI Research Platform with Five Key Concepts Shortlisted
UK AI Security Institute Reveals Frontier AI Trends: Major Advances in Cybersecurity and Software Engineering
