Indian banks urged to embrace AI and blockchain for future preparedness
The Reserve Bank of India (RBI) recently organized a conference exclusively for CEOs of Indian banks, highlighting the importance of adopting technologies like Blockchain and AI.
During the event, RBI Deputy Governor Mahesh Kumar Jain took center stage, urging bank CEOs to embrace technologies such as Artificial Intelligence (AI) and Blockchain.
Jain believes that Indian banks can unlock new avenues for growth and increased stability in the ever-evolving economic landscape by harnessing the power of innovative technologies.
The conference aimed to encourage the integration of these technologies to drive sustainable progress and future-proof the banking industry in India.
SBI Governor addresses the potential risks
During his speech, Deputy Governor Mahesh Kumar Jain evaluated the risks associated with sustainable growth. He further discussed the importance of effective corporate governance, governance structure and how to prepare for potential risk.
According to Jain, banks face a number of challenges arising from technological disruption, customer expectations and cyber threats in today’s ever-changing environment. These factors introduce new risks across technology, business and operations.
As such, the Deputy Governor the council banks to prioritize technology adoption to tackle these challenges effectively.
Jain further emphasized the importance of technology integration, highlighting it as a key strategy to ensure sustainable growth in the banking sector and reduce risk.
In his words, “To prepare for the future,” banks need to “adopt innovative technologies such as Blockchain and AI,” and also invest in cybersecurity measures.
India is embracing blockchain innovation
Reserve Bank of India (RBI) pilot test initiated for the digital rupee, targeting improved cross-border payments and reduced arbitrage losses.
RBI’s Central Bank Digital Currency (CBDC) experiments aim to improve efficiency and promote secure transactions in the retail and wholesale sectors.
India’s finance minister, Nirmala Sitharaman, recently so India is not against blockchain technology, but crypto needs monitoring. She further claims that blockchain provides too many options and can be used in many different ways.
SItharaman believes the central bank must operate crypto; otherwise, it may fall like those without proper government support, causing huge spillover effects like FTX.
She highlights the limitations on individual countries’ actions when it comes to regulating crypto-assets, saying that the coherence of the global order renders such measures ineffective.
As technology transcends borders, she emphasizes the need for coordinated efforts to address the challenges posed by cryptocurrencies, which transcend geographic boundaries. India takes a strict stance on crypto trading, not allowing traders to offset losses against gains.
Notably, Sitharaman introduced a 30% flat tax on crypto income last year and a 1% tax deducted at source (TDS) on crypto trades above 10,000 Indian rupees ($122).
Besides, it’s serious punishesincluding penalties equivalent to TDS for non-deduction and 15% annual interest charges for late payments. Moreover, imprisonment for up to six months is possible, which shows a strong regulatory approach.
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