RBI’s Utkarsh 2029: India’s Secret AI Weapon in Global Finance

While much attention focuses on AI regulation in the US and EU, India’s Reserve Bank is quietly building what could become the world’s most advanced central bank AI capability under its Utkarsh 2029 initiative.

The AI Framework and In-House LLM

Under its medium term strategy Utkarsh 2029, the Reserve Bank of India will introduce norms for artificial intelligence in finance, develop an in-house large language model, while advancing broader goals across regulation, inclusion, markets, technology and global integration.

The RBI plans to formalise the use of artificial intelligence in the financial sector and build a purpose-driven large language model (LLM) for its internal operations. This comes as financial institutions increasingly deploy AI across credit underwriting, fraud detection and customer engagement, prompting the need for regulatory clarity.

Beyond Regulation: Building AI Capacity

Utkarsh 2029 isn’t just about setting rules—it’s about building capability. The initiative includes:

• Issuing framework on AI usage in financial sector
• Developing indigenous, purpose-built LLM for internal functions
• Expanding digital and AI sandboxes
• Scaling up asset tokenisation
• Deploying technology-led supervisory tools
• Promoting responsible innovation

Global Implications

If successful, RBI’s approach could reshape how central banks worldwide approach AI—not just as a regulatory challenge, but as a technological capability to be developed in-house. This represents a significant shift from the traditional regulator role.

The strategy also aims to simplify regulations, reduce compliance burden, and scale UPI for inclusive, low-cost credit delivery—potentially creating a model that other emerging economies could follow.

As financial institutions globally grapple with AI adoption, India’s experiment with building central bank AI capacity could offer valuable lessons on how regulators can both oversee and utilize the technology they seek to govern.