The Reserve Bank of India has, effective from January 4, set up a new FinTech division by subsuming one that was earlier under the Department of Payment and Settlement Systems.
In a circular, the central bank said the new department would not only promote innovation in the sector, but also identify the challenges and opportunities associated with it and address them in a timely manner.
In 2018, a fintech unit had been set up in the Department of Regulation for acting as a central point of contact in the RBI for all fintech-related activities. This unit was later transferred to the Department of Payment and Settlement Systems, Central Office, with a fintech division then formed within this.
The new fintech department will also provide a framework for further research on the subject, to aid policy interventions by the RBI. “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 [RBI] will be dealt with by the fintech department,” the RBI said.
Inter-regulatory coordination and internal coordination on fintech shall also be dealt with by this department.
The new department will be overseen by Ajay Kumar Choudhary, who ahs been appointed by the RBI as an executive director.
The new department comes as the central bank is expected to tackle the problem of coordinating India’s planned central bank digital currency (CBDC). With new regulations expected that will bring the unregulated cryptocurrency sector under the ambit of regulators, the RBI is expected to play a central role in ensuring India maintains a presence in the blockchain ecosystem.
