Skip to main content

New RBI Unit to Track Blockchain and AI EXPLORING NEW AREAS

By
The new unit will research, draft rules and supervise new emerging technologies in the future. The Reserve Bank of India (RBI) has formed a new unit within the central bank to beef up its own intellectual capital in the face of emerging technologies like cryptocurrency, blockchain and artificial intelligence. This new unit will research and possibly draft rules and supervise new emerging technologies in the future, two people familiar with the central bank’s plans said. “As a regulator, the RBI also has to explore new emerging areas to check what can be adopted and what cannot. A central bank has to be on top to create regulations. This new unit is on an experimental basis and will evolve as time passes,” said one of the people cited above.
The unit is just about a month old as of now and though a chief general manager is identified to lead it, a formal announcement internally has not been made yet. An RBI spokesperson did not reply to an email seeking comment. Analysts said RBI is doing the right thing at a time when new technologies are set to change business models. “Unless regulators are part of the ecosystem, they understand and have a clear indication of what is accepted and what is not, it can neither protect the industry it regulates nor the consumers who use it,” said Piyush Singh, managing director-financial services, Asia Pacific and Africa, at Accenture.
“This is true specially in the financial world where paper-based regulations are a passe’ due to the onset of digital technologies. It is extremely important and the right thing to do from RBI's perspective.”RBI has formed this new unit even as it has more than once issued a warning on trading in cryptocurrencies. In December 2017 even as Bitcoins hit a record high, RBI warned users, holders and traders of virtual currencies, including Bitcoins regarding the potential“economic,financial,operational, legal, customer protection and security-related risks associated in dealing with virtual currencies”. 
“These ideas have all taken fruit after governor [Urjit] Patel took charge two years ago. Another similar idea is the setting up of a new data sciences laboratory, which was announced in the April monetary policy,” the person cited above said. In April, RBI said it would set up a data sciences laboratory with professionals from computer science, data analytics, statistics, economics, econometrics and finance background. The idea is to use data, analytics and real time information for different RBI functions like inflation targeting, banking regulations and policy enforcement. This unit on data sciences is likely to start in December 2018.
The Economic Times, 27th August 2018

Comments

Post a Comment

Popular posts from this blog

Govt’s gamble on GST cuts: What do the bond and currency markets signal?

By
  It’s not just humans who suffer from cognitive biases; markets do too. Interestingly, different financial markets exhibit distinct biases, each interpreting events through its own prism of prejudice. Take the recent announcements on GST reforms: equity markets have chosen to view them through the lens of growth, while bond and currency markets are focusing on potential macroeconomic risks—fiscal pressures and current account challenges. So, which lens captures the true pulse?Equity markets may be right in expecting GST reforms to revive consumption, which has remained lacklustre for a while. But the key question remains—will this revival come at the cost of broader macro stability?It is well known that consumption stocks have rallied since the GST rationalisation announcement. But what about bond markets? What signals are they sending since this rejig was announced from the ramparts of the Red Fort?The signs aren't encouraging. Bond prices have slumped and yields have surged sinc...
Post a Comment
Read more

Luxury carmakers urge clarity on GST rates to boost festive season sales

By
  A clear picture regarding new GST rates at the earliest will help the overall auto industry, including the luxury car segment, to regain momentum in the ongoing quarter, which generally sees enhanced sales on account of the festive season.The high-powered GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on September 3-4 to discuss moving to a two-slab taxation.In an interaction with PTI, BMW Group India President and CEO Hardeep Singh Brar said the recent speculation about the change in GST rates has caused uncertainty in the minds of consumers.Consumer interest and demand is strong, but they (prospective buyers) have adopted a wait-and-watch approach, and this delayed decision-making is impacting new vehicle sales at a certain level, he noted."Expediting clarity on GST rates is essential to get back to speed and ensure the auto sector's contribution to economic growth during this quarter is robust," Brar stated.He also hoped that the sustainable p...
Post a Comment
Read more

Sebi proposes tighter norms for green bond third-party reviewers

By
  Sebi on Friday said it has proposed to tighten the norms to appoint independent third-party reviewers or certifiers for green debt securities to align them with requirements for other ESG-linked bonds.In a draft circular, Sebi said that the current norms for green bonds, introduced in February 2023, lack detailed requirements around reviewer independence, conflict of interest mitigation, and disclosure standards that are now in place for other ESG-linked securities under a June 2025 circular.The regulator's latest proposal seeks public comments on a revised framework that would bring parity by incorporating comprehensive criteria for third-party certifiers of green bonds on non-convertible securities.Under the proposed norms, issuers of green debt securities will need to appoint reviewers who are independent of their management, directors, and key managerial personnel. These reviewers will be remunerated in a way that prevents any conflicts of interest and possess relevant expert...
Post a Comment
Read more