Tech entities should develop a robust governance system: RBI ED Ajay Kumar Choudhary

Technology-backed entities such as startups should do more to develop a robust governance system, which is important for sustainability, said Ajay Kumar Choudhary, executive director of the Reserve Bank of India (RBI). The use of technological innovations must be made in a reasonable manner and the risks must be properly managed.

Blind adoption without understanding the biases and models based on artificial intelligence, machine learning and the internet of things built with cutting-edge technology will only be counterproductive, Choudhury said, adding that scalability and interoperability are essential for technology-enabled innovations.

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“RBI’s focus area is innovation, while innovations are desirable, they must also be responsible,” he said.

Citing several central bank initiatives to bolster digital banking services such as peer-to-peer lending and NBFC account aggregation framework, Choudhary said the Reserve Bank of India has also launched a regulatory sandbox, through which innovative solutions are launched on a test. base.

The central bank announced immediate applications for the second cohort on “cross-border payments” and also launched a theme-independent fifth cohort as part of the regulatory sandbox initiative.

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