RBI creates FINTECH department. The FINTECH was created to assess the problems in cryptocurrency transactions. The Reserve Bank of India (RBI) says the department will consequently evaluate the various opportunities incurred in financial technology. The Indian central bank confirmed the department has begun operations on January 4.
The country’s tax agencies are similarly moving into regulating exchanges in cryptocurrencies to avert tax evasion. The FINTECH department became necessary in view of the absence of regulations of crypto activities in the country. In addition, the department will help come up with clear regulations that will foster the crypto industry.
The Link between the Creation of the FINTECH Department by RBI & India Cryptocurrency
Financial experts have equally argued that the establishment of digital currency by RBI will fall under its range of interest or control. The bank had earlier in July 2021 revealed its intention to create an independent digital currency for the country. A test run of the development will likely commence in the coming year, particularly in April.
Arjun Khazanchi, a co-founder and chief legal adviser of Rooba finance says that there are speculations suggesting the call for the regulations of Web 3 assets. This thus becomes the primary catalyst for the new department. In addition, the overwhelming interest in play and earning crypto games calls for the creation of the regulations
Furthermore, Khaxanchi says cross-border payments, asset management, peer-to-peer lending, and other digitalized financial services need regulations. This thus re-awakes financial regulators to be alarmed in a bid to prevent investors from falling victim to fraud.
FINTECH Department Created to Regulate Loan Repayment Defaults
The Financial Stability report of the RBI confirms that there is a default in loan repayments. The default according to the report is present in the FINTECH consumer credit space. Consequently, this loan repayments default will now be under the ambit of the department.
The FINTECH department will, according to reports further mandate procedures for loan taking and repayment. Prior to this development, people had complained about cases of customers falling victims to fraudulent lending platforms. However, The FINTECH will now consequently license all-digital lending apps to screen out fraudulent ones. Lastly, RBI report furthers that the digitalized financial activities enhance risks to its subscribers and the new department will address such risk.