RBI showing interest in technology as it impacts world order: T Rabi Sankar

The impact technology has on human activities made the Reserve Bank of India (RBI) show interest in it, the deputy governor of the central bank, T Rabi Sankar, said on Wednesday.

Speaking at the grand finale of the second global hackathon, "Harbinger-2023 -- Innovation for Transformation", Sankar said fintech is transforming the financial system across the globe.

Various tech groups were given awards for coming up with useful solutions for banks and financial institutions.

"Why is the Reserve Bank of India or for that matter, all central banks, governments and other authorities are suddenly showing too much of an interest and too much of an 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.

He said the central bank basically works on monetary policies, currency issues, banking regulation and supervision.

Technology is far from one of the RBI's operations, apart from the fact that it also has an IT department, Sankar pointed out.

Until recently, technology issues were 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 provide technological services to it, he explained.

"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.

"All of us are familiar with fintech, which is transforming the financial system not just in India but across the world," Sankar said.

In this context, he said social media is 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 pointed out.

He appealed to the creators of such technologies, technological products and innovations to think about the issues of risk involved in technologies.

"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.

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.