Underlining the need for innovation in the financial sector for effective service delivery, Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday called for regulation in the fintech space and not to suffocate it.
Effective regulation is a priority for RBI and regulation should not constrain innovation in the fintech space, Das said at Times Network India Economic Conclave.
The RBI governor said that maintaining banking sector health with a strong capital base and ethics-driven governance remains a policy priority.
Highlighting the role technology and innovation play in serving consumers better and faster, Das said the central bank processed 274 crore digital transactions to provide direct benefit transfer to people, most of which happened during the pandemic.
“Since RTGS (Real-time Gross Settlement), which, along with NEFT (National Electronic Fund Transfer), has been made round the clock now, has multi-currency capabilities, there is scope taking it beyond our shores,” said Das.
Despite RBI’s official opposition to private cryptocurrencies, Das said the regulator is assessing financial stability concerns as it works on a way ahead for a central bank digital currency.
He said the RBI is committed to using all policy tools to support the economic recovery, while preserving price stability and financial stability.
Admitting that the spike in COVID-19 infections is a matter of concern, Das said the nation is equipped with additional insurances this time to tackle the situation.
Das expressed confidence that the new wave of coronavirus infections would not impact economic recovery and maintained RBI’s recent 10.5 percent growth forecast for the next fiscal year.
The RBI governor’s assurance is significant amid apprehensions about surging COVID-19 infections and resultant lockdowns being enforced in several cities.
“Revival of economic activity should continue unabated and I don’t see a downward revision in 10.5 percent growth estimate for FY22, which RBI has given last month,” he said.
Das added that he does not foresee a repeat of the nationwide lockdown enforced last year.
With more than 50,000 COVID-19 cases reported on Thursday, several parts of the country, mainly Maharashtra, Punjab, Kerala, Gujarat, Karnataka, and Madhya Pradesh, are seeing a surge in infections, roiling the equity and bond markets.
(Disclaimer: Additional background information has been added to this PTI copy for context)