India’s central bank, the Reserve Bank of India [RBI] has urged banks to concentrate on Blockchain and AI to be future-ready at a recently organized conference.
The deputy governor of the RBI, Mahesh Kumar Jain, spoke about risk management techniques for stable and sustainable growth. He acknowledged the disruptive paradigm shift in financial services brought on by the continuing Fintech revolution in the industry.
“Banking services are now being bundled with other financial and non-financial services and giving consumers the convenience of accessing the full spectrum of financial products.”
According to the top exec, the rate of technological development is accelerating to the point where banks will need to adjust to compete with technology companies that are constantly developing and making investments in new technology.
The risks of cyberattacks, data breaches, and operational errors have also increased manifold, Jain added.
He then urged Indian banks to adopt cutting-edge technologies like blockchain and artificial intelligence [AI], as well as to focus on digital transformation, improve customer experience, and make investments in cybersecurity measures.
To prepare for the future, Indian banks will need to focus on digital transformation, enhance customer experience, adopt innovative technologies such as AI and blockchain, invest in cybersecurity measures, look for opportunities to derive synergistic benefits through collaboration with other players as well as upskilling their workforce to meet the demands of the digital era.
To maintain long-term resilience and competitiveness in the changing banking market, they will also need to give priority to risk management, regulatory compliance, and sustainability, Jain concluded.
While Blockchain is viewed to be one of the more promising technologies, the RBI has persistently opposed cryptocurrencies, advocating for an outright ban.
India’s Crypto Tax Collection Totalled $19M In FY23
In 2021, Indian authorities imposed a 30% capital gains tax on cryptocurrency assets as well as a 1% tax deducted at source [TDS] on all digital assets transaction proceeds, all of which took effect on April 1, 2022.
As reported by TronWeekly, the Indian government collected 158 crores or $19 million in TDS from its cryptocurrency investors.
According to data given to the Parliament [the legislative body], tax deducted at source [TDS] on payments made upon transfer of virtual digital assets [VDA] generated Rs. 157.9 crores in direct tax income up until March 20, 2023.