💰️ RBI wants a game plan for AI in finance

Good morning. It’s a great day - let’s go after it 💪 

Ruchirr Sharma & Shatakshi Sharmaa  

TABLE OF CONTENTS

• 💰️ RBI wants a game plan for AI in finance

• Bite-sized summaries

  • 🥶 Europe turns to AC as heat intensifies

  • 📊 RBI likely to hold rates, focus on growth

• 🧑‍🍳 What else is cookin’?

MARKETS

🇮🇳 India

• Indian stocks bounced back. Gains were led by healthcare, metal, and auto sectors, bolstered by easing inflation data at a multi-year low. Broader indices also ended higher, reflecting renewed investor optimism despite lingering tariff concerns.

🌍️ International

• US markets advanced as hopes for a Federal Reserve rate cut intensified. Record highs were fueled by steady inflation and strong risk appetite in sectors like tech and small caps.

FINANCE

💰️ RBI wants a game plan for AI in finance

India’s central bank just dropped a 26-point to-do list for making AI a safe and useful part of the country’s financial system.

Until now, banks and fintechs in India have been dabbling in AI without a unified rulebook. That’s fine for chatbots and fraud detection, but as AI starts making lending decisions or running risk models, the stakes get higher — and so do the risks.

What’s new: The Reserve Bank of India’s committee (led by IIT Bombay’s Pushpak Bhattacharyya) wants to set up the pipes and guardrails for AI in finance. Think:

• Digital infrastructure to train Indian-built AI models.

• A standing risk committee to watch over AI deployments.

• A dedicated fund to boost local AI innovation.

• Integration of AI into India’s digital public platforms like UPI.

• Audit frameworks to ensure transparency and accountability.

The idea is to encourage innovation without letting things spiral — because in finance, a bad algorithm can tank more than just your credit score.

Why it matters: If implemented, this could make India one of the few countries with a national-level, sector-specific AI plan. That would give local players the confidence to build world-class AI tools while keeping regulators in the loop. It could also position India as an exporter of “responsible AI” frameworks to other emerging markets.

In short: RBI wants AI in finance to be bold, but not reckless. Or in banking terms — growth, with collateral.

Read more: Economic Times

GENERAL OVERVIEW

🗞️ Bite-sized summaries

🥶 Europe turns to AC as heat intensifies - Record-breaking heat waves are pushing Europe to embrace air conditioning, once seen as unnecessary in many regions. Residential AC sales have doubled since 2010, with France now the fastest-growing market, overtaking Italy and Spain. Northern countries like the UK and even Scandinavia are seeing rising demand. But this cooling boom strains power grids designed for milder climates, often triggering fossil fuel use to meet peaks. Governments face the challenge of balancing comfort with emissions cuts, as many older buildings trap heat. With Europe warming twice the global average, air conditioning is shifting from luxury to necessity—transforming daily life and energy policy.

📊 RBI likely to hold rates, focus on growth - Economists expect the RBI to prioritise supporting growth over curbing inflation, keeping the repo rate at 5.5% for now. Inflation fell to a seven-year low of 1.55% in July, giving the central bank room to cut rates if needed. However, most see no immediate move unless US tariffs on India—currently at 50%—significantly slow growth. GDP forecasts remain around 6.3–6.5%, though some warn that weak data could prompt a 25–50 bps cut later this year. The June quarter GDP data, due August 29, will be closely watched, though it won’t yet reflect the tariff impact.

HEADLINES

🧑‍🍳 What else is cookin’?

What’s happening in India (and around the world 🌍️)

• Beijing doors ajar for trade package delivery.

• Crisis-hit global chip companies vie for an Indian summer via partnership

• Trump warns of make-or-break chance with Putin as pressure mounts.