The Reserve Bank of India (RBI) has created a new Fintech department to deal with key challenges in the burgeoning sector.
According to Yahoo Finance, two key challenges the RBI will be working on are framing cryptocurrency regulations and central bank digital currencies (CBDCs).
The RBI is currently working on two different kinds of CBDCs – wholesale and retail – and the new department will be focused on overseeing their development. Alongside this, India’s parliament is currently set to consider regulations of cryptocurrencies.
The new Fintech department will be headed by Ajay Kumar Choudary as executive director, and will also look after the Risk Monitoring Department and Inspection Department.
Indian technology and policy specialist Vivan Sharan said, “It’s a positive signal of intent to build real regulatory capacity to oversee the fast-paced fintech industry.
“It is also a reflection of the central bank’s desire to deepen digital payments through a focus on innovation, and a recognition of the growing importance of various forms of digital money that will require supervisory bandwidth.”
In 2021, an RBI panel proposed a new four-tier structure for regulating and improving urban cooperative banks.
The RBI set up an expert committee in February last year to examine ways to strengthen the resilience of UCBs. The report from the committee recommends the four-tier structure, with different capital adequacy and regulatory norms based on the deposit that the banks hold. To date, the current regulatory framework only has two tiers.
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