Recently, the Reserve Bank of India (RBI) has launched three major initiatives – PRAVAAH portal, the retail direct mobile app and a fintech repository.
PRAVAAH portal is a secure and centralized web-based portal for any individual or entity to seek authorisation, license or regulatory approval on any reference made by it to the Reserve Bank.
- Features: On the portal, 60 application forms covering different regulatory and supervisory departments can be submitted online.
- On the portal, an entity can track/monitor the status as well as RBI can send a decision related to a specified application in a time bound manner.
- More application forms would be made available as may be required.
Need of PRAVAAH Portal
- Regulatory Requirements: Different entities must obtain licenses or authorizations to conduct activities regulated by the RBI.
- Additionally, regulated entities need to periodically seek specific regulatory approvals from the RBI under various statutes and regulations.
- Presently, the application and approval processes occur through a combination of online and offline methods.
- Streamlining Financial Sector Compliance: The 2023-24 Union Budget has emphasized the necessity to streamline, simplify, and minimize the cost of compliance for financial sector regulators.
- This includes establishing defined timeframes for processing applications under various regulations.
- Role of PRAVAAH: ‘PRAVAAH’ will eventually cover all kinds of applications submitted to the RBI across its functions.
Retail Direct mobile app
The retail direct mobile app will provide retail investors a seamless and convenient access to the retail direct platform and provide ease of transacting in government securities (G-Secs).
- Launching of Retail Direct Portal: In November 2021, the Retail Direct Scheme was launched, granting individual investors the opportunity to hold gilt accounts with the RBI and engage in government securities investment.
- A Gilt Account functions similarly to a bank account, with the distinction that it is debited or credited with treasury bills or government securities rather than currency.
- Advantage of the App: With the launch of the retail direct mobile app, retail investors can now transact in G-Secs using the mobile app on their smartphones.
- Features of the App: Through this application, investors can purchase both central and state government bonds, along with Treasury bills.
- It facilitates buying securities in primary auctions and executing buy/sell orders through the Negotiated Dealing System-Order Matching system (NDS-OM) platform.
Benefits of Retail Direct Scheme
- Direct Access: Within the scheme, small investors have the opportunity to directly purchase or sell government securities (G-Secs), or bonds, without the need for an intermediary such as a mutual fund.
- Zero Default Risk: With the government as the borrower, there’s a sovereign guarantee for the funds, ensuring zero risk of default.
- Interest Rate Advantage: Additionally, government securities may provide more attractive interest rates compared to bank fixed deposits, contingent upon prevailing interest rate trends.
About FinTech Repository
The FinTech Repository aims to capture essential information about FinTech entities, their activities, technology uses, etc.
About Fintech:
- Definition: Fintech, a combination of the terms “financial” and “technology,” refers to businesses that use technology to enhance or automate financial services and processes.
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- FinTechs, both regulated and unregulated, are encouraged to contribute to the repository.
- Management of the Repository: The FinTech Repositories are secure web-based applications and are managed by the Reserve Bank Innovation Hub (RBIH), a wholly owned subsidiary of RBI.
- Functions: The repository would enable availability of aggregate sectoral level data, trends, analytics, etc that would be useful for both policymakers and participating industry members.
EmTech Repositories
A related repository for only RBI regulated entities (banks and NBFCs) on their adoption of emerging technologies (like AI, ML, Cloud Computing, DLT, Quantum, etc.), called EmTech Repository, is also being launched.
- Ownership: EmTech Repositories are secure web-based applications and are managed by the Reserve Bank Innovation Hub (RBIH), a wholly owned subsidiary of RBI.
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