The Reserve Bank of India (RBI) recently hosted a conference exclusively for directors of Indian banks, shedding light on the importance of adopting technologies such as Blockchain and AI.
At the event, RBI Deputy Governor Mahesh Kumar Jain took center stage urging the bank executives to embrace technologies such as Artificial Intelligence (AI) and Blockchain.
Jain believes that Indian banks can unlock new avenues for growth and enhanced stability in the ever-evolving financial landscape by leveraging the power of innovative technologies.
The conference aimed to encourage the integration of these technologies to drive sustainable progress and future-proof the banking sector in India.
SBI governor addresses the potential risks
During his speech, Deputy Governor Mahesh Kumar Jain evaluated the risks of sustainable growth. He also discussed the importance of effective corporate governance, governance structure and how to prepare for potential risks.
According to Jain, banks face a series of challenges stemming from technological disruption, customer expectations and cyberthreats in today’s ever-changing environment. These factors create new risks in the technology, business and operations.
As such the Vice Governor advised banks to prioritize technology adoption to effectively address these challenges.
Jain further emphasized the importance of technology integration and highlighted it as an important strategy to ensure sustainable growth in the banking sector and mitigate risk.
In his words, “To prepare for the future”, banks should “adopt innovative technologies such as Blockchain and AI”, and also invest in cybersecurity measures.
India Embraces Blockchain Innovation
The Reserve Bank of India (RBI) pilot trials started for the digital rupee, aimed at improving cross-border payments and limiting arbitrage losses.
RBI’s Central Bank Digital Currency (CBDC) experiments are aimed at improving efficiency and promoting secure transactions in retail and wholesale.
Indian Finance Minister Nirmala Sitharaman recently said India is not against blockchain technology, but crypto needs monitoring. She further claims that blockchain offers too many options and can be used in many different ways.
SItharaman believes the central bank should power crypto; otherwise it may fall like those without proper government backing, resulting in huge spillovers like FTX.
She highlights the limitations of individual countries’ actions in regulating crypto-assets, stating that the interconnectedness of the world order renders such measures ineffective.
As technology transcends borders, she emphasizes the need for coordinated efforts in addressing the challenges of cryptocurrencies, crossing geographic boundaries. India takes a strict stance on crypto trading and does not allow traders to offset losses against profits.
Notably, Sitharaman last year imposed a 30% flat tax on crypto income and a 1% withholding tax (TDS) on crypto transactions over 10,000 Indian Rupees ($122).
There are also serious ones Finesincluding penalties equivalent to TDS for non-deduction and 15% annual interest charges for late payments. In addition, imprisonment of up to six months is possible, indicating a strong regulatory approach.
Featured image from Pixabay and chart from TradingView.com
