Recognising the role of technology in building economic, social and political world orders, the RBI is using it to make financial systems efficient and protect the public from misuse of technology, at a time when fintech has revolutionised banking and allied activities, Deputy Governor of the central bank T Rabi Sankar said.
The impact technology has on human activities has made the Reserve Bank of India (RBI) show interest in it, he said, speaking at the grand finale of the second global hackathon 'Harbinger-2023 -- Innovation for Transformation' on Wednesday.
"Why is the Reserve Bank of India or for that matter, all central banks, governments and other authorities are suddenly showing an interest and involvement in technology? Why is the RBI involved in a hackathon? This is not something that we could have imagined five years ago," Sankar said.
"I think the answer lies in the nature or impact of technology. Now, all of you would know that technology facilitates human activities. But that is not all that it does," Sankar noted.
He said technology also helps build orders in the world -- economic order, social order, political order.
For the central bank that basically works on monetary policies, currency issues, banking regulation and supervision, technology is far from one of its operations, other than the fact that it also has an IT department, Sankar pointed out.
Until recently, the use of technology was never on the RBI's radar but still, in the last couple of decades, it set up a number of important institutions, such as the National Payments Corporation of India (NCPI), that provides technological services to it, he explained.
"All of us are familiar with fintech, which is transforming the financial system not just in India but across the world," Sankar said.
"The objective of the RBI, therefore, is involving itself in technologies, which is largely two-fold -- guide innovation to maximise the financial well-being of people and efficiency of the financial system, and to anticipate and proactively try and contain and channel any undesirable effects of technologies," Sankar said.
Sankar also pointed out how social media has been restructuring the political order and the social order.
Recent technologies, such as artificial intelligence, synthetic biology, quantum computing and robotics, have the potential not only to revolutionise human and social lives, but also to alter the global order, the RBI deputy governor said.
In this context, he appealed to the creators of such technologies, technological products and innovations to think about the issues of risk involved in technologies.
At the event, various tech groups were given awards for coming up with useful solutions for banks and financial institutions.
He told the gathering that the second edition of the hackathon is the RBI's own small way to create incentives to channelise the creative energy of technology experts to innovate for the benefit of financial inclusion.