The Reserve Bank of India has chosen global consultancy leaders McKinsey and Company India LLP and Accenture Solution Pvt Ltd India to build Artificial Intelligence and Machine Learning systems valuing its supervisory functions.

RBI aims to extensively use advanced analytics, Artificial Intelligence and Machine Learning in order to analyse its massive database and enhance regulatory supervision on the banks and NBFC. To fulfil this, the central bank plans to hire external experts.

Last September, the RBI invited expressions of interest (EoI) to involve consultants in using advanced analytics Artificial Intelligence and Machine Learning for generating supervisory inputs.

As per the evaluation set out in the EoI document, the central bank has reportedly listed seven applicants to participate in the request for proposal process (RFP) to select consultants. The shortlisted seven firms included Accenture Solutions Private Limited; Boston Consulting Group (India) Pvt Ltd; Deloitte Touche Tohmatsu India LLP; Ernst and Young LLP; KPMG Assurance and Consulting Service LLP; McKinsey and Company; and Pricewaterhouse Coopers Pvt Ltd.

Among them, McKinsey and Company India LLP and Accenture Solutions Private Limited India were the ones who got awarded a contract worth rupees 91 crore, according to the Reserve Bank document.

Though RBI has already leveraged the power of AI and ML in their supervisory processes, currently, they are trying to enhance it to ensure that the perks of using advanced analytics can accumulate to the Department of Supervision in the central bank.

The department has been developing and using linear and machine-learnt models for supervisory examinations. The current target is to explore the data to optimise its attributes that can be utilised to generate new and better supervisory inputs as per the EoI.

This supervisory jurisdiction of RBI ranges from various banks like urban cooperative banks, NBFCs, payment banks, small finance banks, and local area banks to credit information companies and all Indian financial institutions. This initiative undertakes supervision of all these entities, and it deals with the assessment of financial soundness, governance framework, solvency, asset quality, liquidity and operational viability, which safeguards the interest of depositors and financial stability.

Moreover, in the data collection domain, these AI and ML technologies are utilised for reporting real-time data, effective data management and dissemination.