NRB’s Landmark AI Guidelines: Governing Financial Sector’s Future Revolution in Nepal
11th December 2025, Kathmandu
Nepal Rastra Bank (NRB) releases new ‘Artificial Intelligence Guidelines’ draft. Learn about the 6 key highlights including Board Accountability, Risk Classification, Data Privacy, and Bias Mitigation that are setting the stage for a secure and transparent AI era in Nepali banking.
NRB’s Landmark AI Guidelines
The financial sector is evolving rapidly, and it is highly encouraging to see Nepal Rastra Bank (NRB) taking a decisive and proactive step to lead this change.
With the release of the new consultative document on “Artificial Intelligence Guidelines,” NRB has laid the crucial groundwork for a future where innovation meets responsibility. The central bank is empowering Licensed Institutions (LIs) to leverage AI for efficiency and customer experience while ensuring that safety, fairness, and trust remain non-negotiable pillars of the system.
The guidelines aim to ensure safe, transparent, and responsible use of AI across the financial system at a time when digital technologies are rapidly reshaping service delivery.
6 Key Highlights Shaping the Future of Finance
NRB’s new framework envisions a robust AI Governance model. Here are the 6 key principles from the consultative document that every finance professional should know:
| Key Highlight | Description | Objective |
| 1. Board-Level Accountability | AI is not just an IT issue. The guidelines mandate that the Board and Senior Management are ultimately accountable for all AI-driven decisions and outcomes. | To ensure clear leadership and accountability. |
| 2. Risk-Based Classification | Institutions must assess systems before deployment to identify “High-Risk” AI (those causing potential financial harm or operating with minimal oversight) and apply stricter controls. | To prioritize controls for effective risk mitigation. |
| 3. No “Black Boxes” (Transparency) | AI decision-making must be explainable to customers and regulators. If an algorithm affects a customer, they have the right to understand how the decision was made. | To ensure customer trust and fairness. |
| 4. Data Privacy & Consent | LIs must obtain explicit consent before using customer data for AI, and customers must have the option to “opt-out” without being denied essential services. | To enforce strong data protection for users. |
| 5. Combatting Bias | The guidelines explicitly require proactive measures to mitigate algorithmic bias, ensuring AI does not discriminate against any individual or community. | To maintain fairness and inclusivity. |
| 6. Mandatory Training | To ensure readiness, institutions must implement capacity-building programs for everyone, from the Board of Directors to operational staff. | To ensure institutional and organizational readiness. |
Comprehensive Strategy for Systemic Resilience
Beyond the core principles, the guidelines mandate that all licensed institutions (including commercial banks, microfinance institutions, and payment system operators) must:
Develop a comprehensive AI strategy and integrated governance framework.
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Define their AI-related risk tolerance as part of their broader risk management structure.
Mitigate a wide range of risks, including operational, ethical, systemic, model-related, and cyber risks.
Establish a cross-disciplinary AI steering committee (or designate an existing committee) to guide strategy, risk oversight, and compliance, approved by the Board of Directors.
Adhere to full outsourcing procedures for any AI-enabled service provided by an external vendor, including due diligence and board approval.
Submit annual reports detailing AI use, risk controls, and customer impacts, and maintain thorough documentation for all AI systems.
Conclusion
This is a robust move to future-proof Nepal’s financial system. It balances the excitement of #FinTech innovation with the prudent guardrails essential for financial stability, aligning Nepal’s practices with international standards. The new guidelines will steer the Nepali financial sector towards a secure, ethical, and transparent #DigitalTransformation.
The question remains: Is the Nepali financial sector ready for full-scale AI adoption? The NRB’s groundwork certainly suggests a confident push toward it.
For more: NRB’s Landmark AI Guidelines
