In January 2022, the Reserve Bank of India (RBI) sets up a separate internal department for fintech (Financial technology) by subsuming the fintech division of DPSS (department of payment and settlement systems), Central Office (CO). to facilitate innovation, and help identify, address challenges and opportunities in the fintech sector.
- Ajay Kumar Choudhary, who was recently promoted as the Executive Director of RBI was appointed as head of the department.
- The department will be administratively attached to the centralised administrative division (CAD) of RBI.
Key Functions of the Department:
i.All matters related to inter-regulatory and international coordination on fintech will be dealt with by the department and it will report to the RBI’s CAD.
ii.The department also will provide a framework for further research on the fintech to aid in policy interventions.
iii.The fintech department will dealt 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 fall under the purview of RBI.
iv.DPSS – It works on policy formation and authorisation of payment and settlement system operators in the country.
Note – A financial technology unit was set up in 2018 and in 2019, the RBI came out with a framework for a regulatory sandbox to provide a structured avenue to develop innovation-enabling or innovation-responsive regulations.
Regulatory changes over Fintech Sector:
i.On December 23, 2021, the RBI extended the card-on-file (CoF) tokenisation deadline by 6 months i.e. to June 30, 2022.
ii.Recently, RBI issued a framework for facilitating small-value digital payments in offline mode using cards, wallets, mobile devices, etc, to push digital transactions in rural and semi-urban areas.
- The upper limit of an offline payment transaction was fixed at Rs 200.
Recent Related News:
India hosted the 2nd edition of Global FinTech Festival (GFF) 2021, the World’s largest virtual fintech festival from September 28 to 30, 2021. Theme: ‘FinTech: Empowering a Global Digital Economy’.
About Reserve Bank of India (RBI):
Establishment– April 1, 1935
Headquarters– Mumbai, Maharashtra
Governor– Shaktikanta Das
Deputy Governors– Mahesh Kumar Jain, Michael Debabrata Patra, M. Rajeshwar Rao, T. Rabi Sankar