Home Breaking News India’s Central Bank RBI to set up ‘Innovation Hub’ for finance sector 

India’s Central Bank RBI to set up ‘Innovation Hub’ for finance sector 

RBI Innovation Hub

The Reserve Bank of India (RBI), India’s Central Bank, is in the process of setting up an ‘innovation hub’ for the finance sector of the country. This hub will focus on future technology in the financial services space. The detailed guidelines will be released soon.

“Innovation Hub is one of the things that we are trying out where we are looking at actually creating ideation, creating ideas to evolve technologies,” said RBI executive director T Rabi Sankar in a virtual conference that was organised by FICCI.

The innovation hub will allow technology firms, financial entities, academic entities and funding agencies to interact and start the entire process from ideation to creation to piloting of solutions.

Reserve Bank India

RBI has also released a framework for setting up umbrella entities for operating pan-India retail payments systems. As per the framework, the companies with a net worth greater than Rs 500 crore (US$ 68M) will be eligible to set up an umbrella entity that will be permitted to set up, manage and operate new payment systems in the retail space comprising of ATMs, White Label PoS, Aadhaar-based payments and remittance services. The umbrella entity will also be permitted to operate clearing and settlement systems for banks and non-banks, manage risks such as credit risks, settlement risks and liquidity and operational risks.

RBI has already invited applications from eligible companies to be submitted by February 26, 2021. In its statement on ‘Developmental and Regulatory Policies’, RBI also said that the Innovation Hub will support, promote and hand-hold cross-thinking, spanning regulatory remits and national boundaries.

The Hub will act as a centre for incubation of new capabilities that can be leveraged to create innovative financial products and services. The main objective of this is to promote financial inclusion, business continuity during emergency, consumer protection and business services among others.

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