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The Central Bank of India has created a new department to deal with all financial technology (fintech) related matters in the country. The department will foster innovation in the sector and oversee the development and launch of the digital rupee.
In a circular, the Reserve Bank of India (RBI) announced that the creation of a new department was necessary due to the rapid progress in the sector and the need to keep pace with developments in this area.
“In order to pay additional attention to the field and innovations in the fintech sector in accordance with the dynamically changing market, it was decided to create a fintech department in the bank,” the circular says.
The fintech division was first created in 2018, but then it was set up under the Department of Regulatory Affairs, and it was tasked with being the focal point of RBI for all matters related to financial technology. Then, in 2020, it was transferred to the Department of Payment and Settlement Systems, after which this year it was separated into an independent unit.
“The department will not only drive innovation in the sector, but also identify the related challenges and address them in a timely manner,” RBI notes in its circular.
He also expects the new department to provide a basis for further research on this topic that can help guide RBI’s policy.
RBI has appointed Sri Ajay Kumar Chowdhary as head of the new department. Kumar has three decades of experience in oversight, regulation, payments and settlements, and foreign exchange management.
Bank sources said Kumar’s appointment as head of fintech could have a significant impact on RBI’s development of the digital rupee. RBI recently announced that it will seek to create a basic version of the central bank digital currency (CBDC) as it is a safer and more reliable alternative. The bank expects to launch the first pilot project in 2023.
“Ajay Kumar Choudhary can be expected to be much more proactive on the central bank’s digital currency. This could mean a departure from the RBI’s position to accelerate the CBDC pilot,” said one media source.
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