Nepal Rastra Bank (NRB) is moving to oversee the growing use of artificial intelligence in banks and financial institutions through a new comprehensive guideline. The central bank has released a draft for public feedback until December 30. The proposed rules aim to ensure transparency, accountability, and strong data protection in AI deployment. They specify that boards and senior management will be responsible for risks and decisions arising from AI systems. The draft categorizes AI tools by risk level, with high-risk systems—such as those handling biometric data or large financial exposures—requiring enhanced oversight. Institutions must also inform customers when AI influences decisions and set up dedicated grievance-handling mechanisms.
