Reserve Bank of India (RBI) has said that it will set up a separate fintech department. The decision has been taken in view of the fintech sector’s rapidly changing landscape. Earlier, in 2018, RBI had set up a financial technology unit.
In an internal circular, the RBI said that it decided to set up the department to further focus and facilitate innovation in the Indian fintech sector. To this end, a new department has been created with effect from January 4, 2022. The department so formed is aimed at promoting innovation in the sector and identifying the challenges and opportunities associated with it and address them in a timely manner.
In addition, the new fintech department will also serve as a framework for further research on the subject that may aid policy interventions by the central bank. Under the purview of the new fintech department, 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 scope of the bank, will be dealt with by the fintech department.
According to RBI, the newly formed fintech department will be administratively attached to the centralised administrative division (CAD) of the central office. The fintech sector has been facing several regulatory changes as new-age startups enter the financial services sector. As part of the new rules, online merchants are barred from storing card details of users on their platforms. Prior to that, in October 2021, card-based recurring payments saw disruption, with customers having to re-authorise standing instructions for recurring payments or online subscriptions up to Rs 5,000.
