The Reserve Bank of India (RBI) has set up a FinTech Department to promote innovation and help in identifying and addressing the challenges and opportunities associated with it in a timely manner. While the central bank has not made a formal announcement in this regard yet, it acknowledged its presence in an internal circular accessed by the media. The RBI has also listed Executive Director AK Choudhary as the head of its FinTech Department. Also Read - RBI introduces new digital payment method that doesn’t need internet: Check details
As per reports, the FinTech Department came into effect on January 4, 2022, by subsuming the fintech division of the Department of Payment and Settlement Systems. Also Read - RBI reportedly wants a complete ban on cryptocurrencies: No more Bitcoin billionaires in India?
RBI‘s internal circular says that the FinTech Department has been set up to focus on innovation in the financial technology sector. The bank in the circular said that the department has been set up “keeping pace with the dynamically changing landscape.” Also Read - HDFC Bank cautions users about changed online banking guidelines: Here’s what you need to know
Furthermore, the central bank said that the FinTech Department will not only “promote innovation in the sector, but also identify the challenges and opportunities associated with it and address them in a timely manner.” Additionally, it will provide a framework for further research in the financial technology sector such that it can help the RBI in formulating policies in this area.
“…all matters related to the facilitation of constructive innovations and incubations in the fintech sector, which may have wider implications for the financial sector/markets and falling under the purview of the Bank, will be dealt with the Fintech Department. All matters related to inter-regulatory coordination and internal coordination on fintech shall also be dealt with by the Department,” the circular said.
It is worth noting that the creation of the FinTech Department follows the setting of a fintech unit under the Department of Regulations back in 2018. The unit was created after the RBI set up an inter-regulatory Working Group (WG) in July 2016 to “look into and report on the granular aspects of FinTech and its implications so as to review the regulatory framework and respond to the dynamics of the rapidly evolving FinTech scenario.” Later, the Department of Regulations’ FinTech was transferred to the Department of Payment and Settlement Systems. This year, Department of Payment and Settlement Systems’ FinTech unit has been promoted into a separate department.