RBI’s AI reset; ETSA ‘Startup of the Year’ nominees

The central bank’s new AI framework will send banks back to the drawing board. This and more in today’s ETtech Top 5.

Also in the letter:
■ Urban Company’s makeover play
■ HCLTech’s AI thesis
■ New Gemini, Claude tools

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The Reserve Bank of India’s (RBI) new artificial intelligence (AI) rulebook is more than just a framework. It is a reset.

Dubbed FREE-AI, short for Fairness, Robustness, Efficiency, and Explainability, the RBI’s latest push will force banks to rethink how they build and use artificial intelligence systems. The rules are clear, and the bar is higher than ever.

Why it matters: Banks will now need to establish structured governance layers, maintain deep-cleaned data sets, and implement workforce-wide upskilling to meet compliance requirements. What was once industry best practice is now regulation, signalling a shift from innovation-led deployment to principle-led oversight.

Details:

• Explainability is key. It means every AI-driven decision must be traceable to logic a human can follow, said Ajay Trehan, CEO of AuthBridge.
• EY’s Karthik Pasupathy added that AI audits now require governance reviews, clear approvals, and stress-testing under extreme conditions.
• Machine learning techniques like SHAP (SHapley Additive exPlanations) and LIME (Local Interpretable Model-agnostic Explanations) help interpret complex models, but fairness still hinges on eliminating historical data biases, Pasupathy noted.

Between the lines: Per experts, the most formidable challenge isn’t tech. It’s culture. Cleaning up legacy data and building fairness into daily workflows will take more than software patches.

What’s next: Short-term compliance costs will rise, but the long game promises lower risk, stronger customer trust, and more reliable decision-making. With many Indian banks still in early AI stages, FREE-AI is less a guideline and more a ground-zero moment.

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The Economic Times Startup Awards (ETSA) are back! We have been hard at work for the past few months to bring you the 11th edition of the prestigious honours.

Background: Launched in 2015 to celebrate startups and the new-age economy, ETSA has chronicled India's entrepreneurship ecosystem over the past ten years. Some of the past winners of the coveted Startup of the Year award, such as Freshworks, Delhivery, Zomato, and Swiggy, have gone on to become publicly listed companies in the new economy. Other winners, such as Ather Energy (Best on Campus in 2016) and Ixigo (Comeback Kid in 2021), have also debuted on the Indian bourses, signalling a robust startup economy.


We unveil the nominees in two of our most coveted categories: Startup of the Year, celebrating breakthrough innovation, top-class execution, and fast-paced growth, along with Midas Touch, which recognises the most lucrative exit of the year.

ET reached out to more than 200 of the country's leading entrepreneurs, investors, industry groups, and other stakeholders to compile this list of the brightest entrepreneurial talent.

• Urban Company
• Rapido
• Meesho
• Groww
• Porter
• PhysicsWallah

• Ashish Agrawal, Peak XV Partners
• Pranav Pai, 3one4 Capital
• Shailesh Lakhani, Peak XV Partners
• TCM Sundaram, Chiratae Ventures

Who's on the jury: A high-powered jury will meet in Bengaluru tomorrow to pick the winners of ETSA 2025.

• Amitabh Kant, jury chair, India's former G20 Sherpa
• Prashanth Prakash, partner at venture capital fund Accel
• Kalyan Krishnamurthy, CEO of Flipkart Group
• Sahil Barua, cofounder and chief executive, Delhivery
• Ruchi Kalra, cofounder of OfBusiness and Oxyzo
• Adwaita Nayar, cofounder of Nykaa
• Ghazal Alagh, cofounder of Mamaearth
• Tarun Mehta, cofounder and CEO, Ather Energy
• Harshil Mathur, cofounder and chief executive, Razorpay
• Faraz Khalid, chief executive of Dubai-based ecommerce major Noon
• Satyan Gajwani, chairman of Times Internet

Over the past few days, we also revealed nominees for our six other categories: Bootcamp Champ, Top Innovator, Best on Campus, Comeback Kid, Woman Ahead, and Social Enterprise.

Stay tuned for all the ETSA 2025 coverage and the names of our winners.

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(L-R) Varun Khaitan, Raghav Chandra, Abhiraj Singh Bhal, cofounders, Urban Company

Urban Company is giving home makeovers a rapid refresh.

What’s the news: The IPO-bound services platform has rolled out “Revamp”, a new offering that promises to transform homes in just one day.

Why it matters: Live in Mumbai, Delhi NCR, Bengaluru, and Hyderabad, Revamp aims to blend aesthetics, speed, and reliability —three qualities often absent from traditional renovation work, according to its cofounder, Abhiraj Singh Bhal.

Timing right: The launch comes as Urban Company gears up to raise Rs 1,900 crore through an initial public offering. It has already been expanding beyond its core beauty and repair verticals. Recent bets include InstaHelp (a quick commerce variant for home services) and Native (a line of consumer products such as smart locks and water purifiers).

In numbers:

• FY25 operating revenue jumped 38% to Rs 1,144 crore.
• The company swung to a Rs 240 crore profit (compared to a Rs 93 crore loss last year), helped by a deferred tax credit.
• Pre-tax profit stood at Rs 28 crore.

Between the lines: Urban Company has cut its IPO size from Rs 3,000 crore to Rs 1,900 crore, signalling a more cautious approach in choppy markets. With Revamp, it is banking on India’s growing appetite for fast, curated interiors to boost growth as it heads for the bourses.

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Roshni Nadar

Indian IT major HCLTech is leaning into artificial intelligence — not to replace jobs, but to redefine them.

At the company’s annual general meeting, chairperson Roshni Nadar Malhotra addressed shareholders with a clear message: “AI is being introduced as a co-pilot to augment human capabilities, not replace them.”

Why it matters: That stance sharply contrasts with moves by peers like TCS, which recently announced 12,000 job cuts in what is now India’s biggest IT layoff.

• HCLTech is instead doubling down on reskilling.
• Around 15% of freshers will be hired into specialised AI roles.
• The company is also developing an “elite cadre” of highly skilled staff, earning salaries three to four times higher than typical entry-level packages.

Numbers:

• Q1 FY26 headcount: 223,151 (down slightly from 223,420).
• Freshers hired: 1,984.
• Attrition dropped from 13% in March to 12.8% in June.

Also Read: Top six IT firms saw staff additions plunge 72% in Q1

Between the lines: Hiring has slowed, but HCLTech is pitching itself as the “responsible AI adopter”, betting that a growth-oriented approach to talent will help it stand out as rivals opt for cuts.

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Google and Anthropic have fired fresh shots in the AI race, unveiling tools that push artificial intelligence deeper into daily workflows. Their focus is on speed, usability, and smarter interactions.

Google:

• Google has launched Gemini 2.5 Flash Image, a tool that enables users to blend images, maintain character consistency across frames, and make edits using natural language prompts.
• It is now live via the Gemini app, API, and Vertex AI, and priced at $30 per million output tokens (roughly $0.039 per image).

Anthropic:

• Anthropic is testing Claude for Chrome with 1,000 Max-plan users.
• The extension runs in a side panel, supports limited automation, and includes privacy protections like blocking sensitive sites and requiring explicit user consent for “high-risk” tasks.

Between the lines: The browser is quickly becoming AI’s new frontier. Google has already integrated Gemini into Chrome, Perplexity has launched Comet, and OpenAI is reportedly building its own browser.

What’s next: Expect a wave of AI-first browsers, as both tech giants and startups race to reimagine how users browse, search and interact online.