Policy must balance innovation with accountability, resilience: RBI Deputy Guv Rohit Jain

Mumbai: RBI Deputy Governor Rohit Jain stressed on Wednesday that policy must strike a balance between fostering innovation and maintaining accountability and resilience. At the Global Fintech Fest 2026, Jain argued that policy should create an environment where useful innovation can develop responsibly. This requires setting clear guidelines for risks, providing space for experimentation in emerging areas, and allowing the framework to adapt as technology evolves.

Jain emphasized that policy must be informed by real-world experiences. In a rapidly changing landscape, regulators cannot solely rely on returns and supervisory observations. Regular interactions with financial institutions, fintechs, and technology providers can help identify new use cases and emerging concerns early, while also providing industry with clearer expectations regarding regulatory requirements.

Carefully controlled use of emerging technologies, rather than speculation alone, can offer better insights into their workings.

Regarding regulatory sandboxes, Jain highlighted their importance in testing genuinely novel applications within defined boundaries before wider deployment. Over-regulating too early risks creating rules for a technology not yet fully understood or for a changing architecture, while late regulation may allow the technology to become deeply embedded before its risks are fully understood. There is no perfect timing between these two outcomes.

Jain urged policymakers to keep the end-users in mind, emphasizing that financial services ultimately serve people such as savers, borrowers, merchants, and families. Their confidence in technology depends on whether it delivers fair, reliable, and safe outcomes. The responsibility lies with the financial system to ensure that technology remains beneficial, resilient, and responsive to those it serves.

Jain stressed that purpose, prudence, and policy must progress together, cautioning that purpose without prudence can lead to recklessness, while prudence without purpose can result in stagnation. The ultimate goal should be to enable technology to make finance more useful, resilient, and tailored to the needs of those it serves.