PRAVAAH PORTAL - ECONOMY
News: RBI unveils Pravaah portal,
Retail Direct Mobile App and FinTech Repository
What's in the news?
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Reserve Bank of India (RBI) Governor Shaktikanta
Das unveiled three major initiatives of
the Reserve Bank, namely the Pravaah portal, the Retail Direct Mobile App and a
FinTech Repository.
Key takeaways:
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These initiatives were earlier announced as part of
RBI’s bi-monthly Statement on Development and Regulatory Policies in April
2023, April 2024 and December 2023 respectively.
PRAVAAH Portal (Platform
for Regulatory Application, VAlidation and AutHorisation):
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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:
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On the portal, 60 application forms covering
different regulatory and supervisory
departments can be submitted online.
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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.
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More application forms would be made available as
may be required.
Need of PRAVAAH Portal:
1. Regulatory
Requirements:
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Different entities must obtain licenses or
authorizations to conduct activities regulated by the RBI.
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Additionally, regulated entities need to
periodically seek specific regulatory approvals from the RBI under various
statutes and regulations.
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Presently, the application and approval processes
occur through a combination of online and offline methods.
2. Streamlining
Financial Sector Compliance:
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The 2023-24 Union Budget has emphasized the
necessity to streamline, simplify, and minimize the cost of compliance for
financial sector regulators.
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This includes establishing defined timeframes for
processing applications under various regulations.
Role of PRAVAAH:
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‘PRAVAAH’ will eventually cover all kinds of
applications submitted to the RBI across its functions.
Other Key Takeaways:
Retail Direct Mobile
App:
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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.
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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).
Advantage of the App:
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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:
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Through this application, investors can purchase both central and state government
bonds, along with Treasury bills.
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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:
1. Direct Access:
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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.
2. Zero Default Risk:
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With the government as the borrower, there’s a sovereign guarantee for the funds,
ensuring zero risk of default.
3. Interest Rate
Advantage:
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Additionally, government securities may provide
more attractive interest rates compared to bank fixed deposits, contingent upon
prevailing interest rate trends.
FinTech Repository:
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The FinTech Repository aims to capture essential information about FinTech
entities, their activities, technology uses, etc.
Management of the
Repository:
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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:
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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:
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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:
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EmTech Repositories are secure web-based
applications and are managed by the Reserve Bank Innovation Hub (RBIH), a
wholly owned subsidiary of RBI.