RBI to Set Up 'Innovation Hub' to Promote Financial Inclusion

Reserve Bank of India is setting up an 'Innovation Hub' in the country for ideation and incubation of new capabilities which can be leveraged to deepen financial inclusion and promote efficient banking services.

"The Innovation Hub will support, promote and hand-hold cross-thinking spanning regulatory remits and national boundaries," RBI said in its 'Statement on Developmental and Regulatory Policies'.

The Hub, it added, will act as a centre for ideation and incubation of new capabilities which can be leveraged to create innovative and viable financial products and/or services to help achieve the wider objectives of deepening financial inclusion, efficient banking services, business continuity in times of emergency, and strengthening consumer protection, among others.

Observing that the Reserve Bank has constantly endeavoured to encourage responsible innovation by entities in financial services sector, it said the central bank earlier took various initiatives for setting up Regulatory Sandbox.

The Regulatory Sandbox framework was one such recent initiative in which digital payments were the first cohort, RBI said, adding "six proposals were accepted under the Sandbox, the pilot studies/trials of which have been delayed on account of the present COVID-19 situation." Regulatory sandbox (RS) usually refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may (or may not) permit certain relaxations for the limited purpose of testing.