After organizing a financial technology unit in 2018, the Reserve Bank of India (RBI) is now arranging a separate fintech department in view of the bank’s rapidly changing landscape.

The central bank has said that it has decided to form a department to focus further focus and enable innovation in the Indian fintech sector.

“Accordingly, a new department has been created with effect from January 4, 2022, by subsuming the fintech division of DPSS (Department of payment and settlement system), CO. The department will not only promote innovation in the sector, but also identify the challenges and opportunities associated with it and address them in a timely manner,” RBI says.

DPSS works on policy formation and authorization of payment and settlement system operators in the country, among others.

Besides identifying challenges and opportunities, the new fintech department will also provide a framework for further research on the subject that could aid policy interventions by the central bank, according to the RBI.

“Accordingly, if matters related to the facilitation of constructive innovations and incubations in the fintech sector, which may have wider implications for the financial sector/markets and fall under the purview of the Bank, will be dealt with by the fintech department,” RBI adds.

According to the central bank, the fintech department will be directorially attached to the centralized administrative division (CAD) of the central office.

The fintech sector has faced many changes as new-age start-ups enter the financial services sector. Last month, RBI extended the deadline for card tokenization from January 1, 2022 to June 30, 2022, after several companies and industries said they needed more time to make the necessary changes.

As per new rules, online merchants are restricted from storing card details of users on their platforms. This is to avoid online payment fraud, but will also increase friction in online payments with users having to re-enter their card details for every purchase.

Recently, RBI also made the decision to allow payments of up to Rs. 200 to be made through offline channels, without the need for an active internet connection.