Friday, August 7, 2020

RBI will set up “Innovation Hub” for Financial Inclusion

 On 6 August , 2020, the Reserve Bank of India said it will set up an 'Innovation Hub' in the country. Hub will promote innovation across the financial sector by leveraging technology and create an environment which will facilitate and foster innovation.

Aim:-

To encourage start-ups and companies address the challenges of financial inclusion and efficient banking transactions. The hub aims to bring solutions to the financial sector by tapping into areas such as cybersecurity, data analytics, delivery platforms, and payment services.


About Innovation Hub -

The hub is being launched to promote the start ups in the country. It will help in ideation and incubation of new capabilities which can be leveraged to deepen financial inclusion and promote efficient banking services.

Important facts :-

  • The innovation hub will support, promote, and handhold cross-thinking, spanning regulatory remits and national boundaries.
  • Areas such as cybersecurity, data analytics, delivery platforms, payment services to remain in the forefront.
  • The RBI last year had announced a regulatory sandbox programme for new experiments in the field of financial technology under its supervision.
  • While six programmes were shortlisted by the RBI for the first set of pilots, they have now been delayed due to the pandemic.

Regulatory Sandbox-

The Regulatory Sandbox framework was one such recent initiative in which digital payments were the first cohort.The purpose of a regulatory sandbox stemmed from then RBI executive director Sudarshan Sen’s committee in 2017, referring to live testing of new products or services in a controlled environment for which regulators may permit certain regulatory relaxations for the limited purpose of testing.

Source - Business Standard

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