New Delhi: The central bank of the country is working on phased implementation of Central Bank Digital Currency (CBDC) in both wholesale and retail segments, said Ajay Kumar Choudhary, Executive Director, RBI, on Wednesday. He said with the announcement of CBDC in the Union Budget, necessary amendment to the relevant section of the RBI Act 1934 has been made enabling the RBI to conduct pilot and subsequent issuance of CBDC.
“RBI is working on the phased implementation of a Central Bank Digital Currency in both wholesale and retail segment,” he said while addressing ‘PICUP Fintech Conference and Awards’ organized by FICCI, jointly with IBA. Choudhary said that the Indian Fintech market currently stands as the third largest Fintech ecosystem in the world, just behind the US and China.
“In next five years, the Indian Fintech sector is expected to grow with a cumulative annual growth rate of around 22 per cent. Today, the world is looking up to India, as we continue to innovate and lead the way seamlessly imbibing the new age technology without compromising on the safety and security aspects,” he added.
The rapid growth of Fintech in India, Choudhary added, is also a resonance of the accelerated digitization with the emergence of technologies like AI, Cloud Computing, Big Data, ML, etc. This is coupled with the demographic dividend, easier access to mobile, higher internet speed and bandwidth and reduced cost of technological products, he noted.
Choudhary also emphasized that as the regulator, it is also important for the RBI to identify the risks and challenges associated with all innovations. The central bank has taken several measures to foster innovation in the Fintech sector which includes regulatory sandbox, Reserve Bank Innovation hub, etc.
Enumerating on the four success pillars for Fintech, Choudhary said: “It is imperative to implement responsible innovations which serves the under privileged, corporate governance; make technological advancements that are scalable and interoperable; giving importance to policy on data privacy, consumer protection, cyber security and prevention of financial crime.”
AK Goel, Chairman, IBA and MD and CEO, Punjab National Bank, said that Fintech has the potential to fundamentally transform the financial landscape and provide consumers with a great variety of financial products at competitive prices along with improved efficiency. “The landscape of Fintech is changing at lightning speed and this transformation is essential as it impacts everything related to payment, money and banking,” he added.
Amitabh Chaudhry, Chairman, FICCI Banking Committee and MD and CEO, Axis Bank, said that banks have experience, brand recall, legacy and customers' trust, while Fintech brings in the new age expertise and nimbleness needed to make the leap into the digital space. “Many banks are joining with Fintech startups to upgrade their existing systems and enable smoother operations to deliver a better experience to their customers,” he added.
Saurabh Tripathi, Chairman, FICCI Fintech Committee and MD and Senior Partner, BCG, said: “We are on the verge of data protection becoming a real issue. The open banking construct can't work without a very strong data protection framework. Geopolitical risks are here to stay, and they are going to force even more localization.” /BI/
