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MUMBAI: The RBI has set up a fintech department to facilitate innovation, and help identify and address challenges & opportunities in the new-age sector. The central bank has appointed Ajay Kumar Choudhary, executive director, to head the department.
All matters related to inter-regulatory and international coordination on fintech shall also be dealt with by the department, which will report to the RBI’s centralised administration division. It will also provide a framework for further research on the subject that can aid policy interventions.
Most startups in fintech had started operating as unregulated entities. A meeting of the senior management committee of the RBI in June 2018 had resulted in the creation of a fintech unit in the department of regulation. In 2019, the RBI came out with a framework for a regulatory sandbox ‘to provide a structured avenue for the regulator to engage with the ecosystem and to develop innovation-enabling or innovation-responsive regulations’.
The RBI had decided to push innovation primarily with the objective of bringing down cost of financial services and improving financial inclusion. As most fintech activities then were in the area of payments, the unit was transferred to the department of payment and settlement systems in July 2020.
“To give further focus to the area and facilitate innovation in the fintech sector in keeping pace with the dynamically changing financial landscape, it was decided to set up a fintech department in the bank. With the formation of the new department from January 04, 2022, the erstwhile fintech division under the payments department has been subsumed into it,” the RBI said in a circular.
“Accordingly, all matters related to the facilitation of constructive innovations and incubations in the Fintech sector, which may have wider implications for the financial sector / markets and falling under the purview of the bank, will sector/markets the fintech department,” the circular said.





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