RBI sets up Department of Fintech to promote innovation, formulate policies in FinTech sector

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The Reserve Bank of India (RBI) has set up a fintech department to help promote innovation and timely identify and address the challenges and opportunities associated with it. Though the central bank is yet to make a formal announcement in this regard, it has acknowledged its presence in an internal circular accessed by the media. RBI has also listed executive director AK Choudhary as the head of its fintech department.

According to reports, the Fintech division came into effect on January 4, 2022, merging the Fintech division of the Payment and Settlement Systems Department.

An internal circular of RBI states that the Department of Fintech has been set up to focus on innovation in the financial technology sector. In the circular, the bank said that the department has been set up “to keep pace with the dynamically changing scenario”.

Furthermore, the central bank said that the fintech department will not only “foster innovation in this sector, but also identify challenges and opportunities associated with it and address them in a timely manner.” Additionally, it will provide a framework for further research in the fintech sector such that it can help RBI formulate policies in this area.

“…All matters relating to facilitating creative innovations and incubation in the FinTech sector, which may have cascading implications for the financial sector/markets and fall within the purview of the Bank, will be dealt with by the Department of FinTech. Inter- on Fintech. All matters relating to regulatory coordination and internal coordination will also be dealt with by the department,” the circular said.

It is worth noting that the creation of the fintech division follows the establishment of a fintech unit under the Department of Regulations in 2018. The unit was created following the setting up of an Inter-Regulatory Working Group (WG) by RBI in July 2016. Explore and report on the finer aspects of fintech and its implications to review regulatory frameworks and respond to the dynamics of the rapidly evolving fintech landscape. Later, Fintech from the Department of Regulation was transferred to the Department of Payment and Settlement Systems. This year, the fintech unit of the Department of Payment and Settlement Systems has been promoted to a separate department.

First appeared in BGR India after RBI set up the Department of Fintech to promote innovation, formulate policies in the fintech sector.

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