Mindful of the growing importance of financial technology innovations, the Reserve Bank has set up a working group to work out a regulatory framework to bolster financial technology and digital banking.
“RBI has set up an inter-regulatory working group to study the entire gamut of regulatory issues relating to financial technology and digital banking in India,” RBI said in a release.
The sub-committee of the Financial Stability and Development Council at its meeting held on April 26 had decided to set up such a group to look into the issue and report the finer aspects.
The mandate is to gauge implications, review and appropriately reorient the regulatory framework and respond to the dynamics of the rapidly-evolving financial technology scenario.
Among the terms of reference of the working group is “to chalk out appropriate regulatory response with a view to re-aligning/re-orienting regulatory guidelines and statutory provisions for enhancing financial technology/digital banking associated opportunities while simultaneously managing the evolving challenges and risk dimensions,” RBI said.
It is also tasked with assessing opportunities and risks arising from digitisation and use of financial technology, besides finding how these can be utilised for optimising financial product innovation and delivery to the benefit of users and other stakeholders.
RBI said the group will also assess the implications and challenges for the various financial sector functions such as intermediation, clearing, payments being taken up by non-financial entities.
It will also examine cross-country practices and study models of successful regulatory responses to disruption across the globe.
RBI has invited views from representatives from any area relevant to its terms of reference and may also, at its discretion, co-opt entities in the payment, telecom, software and start-up ecosystem.
The 13-member inter-regulatory working group to be chaired by RBI Executive Director Sudarshan Sen is expected to submit its report in six months after its first meeting.