New RBI chief: ‘Stability, trust and growth key pillars for India’
The new governor of the Reserve Bank of India (RBI), India’s central bank, has pledged to make stability, trust and growth key drivers of the bank’s policy.
Sanjay Malhotra held his first press conference last week after officially assuming office, replacing Shaktikanta Das, who held the post for six years.
Reflecting on his new role, Malhotra described it as both an honour and a significant responsibility. He stated that he would uphold the bank’s legacy and take it forward. He said: “The RBI, in its mandate, has given itself the theme of stability, trust and growth. All these three are very apt pillars which we need to continue building on.”
He said India’s central bank would prioritise public welfare. “Stability in policy and continuity is very important. Decisions will be taken with public interest to preserve trust in this institution,” he said.
While stressing the importance of stability, Malhotra acknowledged the need for adaptability in a rapidly changing global environment. “We cannot be stuck. We have to be agile while maintaining policy continuity,” he emphasised.
The new governor also reiterated the central bank’s role in promoting financial inclusion through the banking sector and ensuring broader access to financial services.
According to the Business Standard website, Malhotra’s appointment comes at a time of slowed economic growth and inflation concerns. Although the RBI expects inflation to drop by the January-March quarter, consumer concerns remain.
In a farewell speech, outgoing governor Shaktikanta Das said he believed a home-grown central bank digital currency (CBDC), the digital rupee, could transform India’s economy
Das highlighted his six-year-long effort to capitalize on new technologies, including setting up the RBI Innovation Hub in Bengaluru and a regulatory sandbox for fintech innovation.
Speaking about India’s progress in CBDC development, Das noted that many central banks worldwide are stuck in initial discussions and experimentation. On the other hand, he said: “RBI, among the central banks, is a pioneer,” as it is one of the few central banks to launch a pilot CBDC project.
In November, the RBI sought to add new trading partners in Asia and the Middle East to expand its cross-border payments platform for instant settlements.
A related Bloomberg report suggested that India was exploring the use of CBDCs as its primary settlement mechanism for the payments platform, which is currently operational in Sri Lanka, Bhutan and Nepal.
Previously, Das had advised against implementing a “system-wide CBDC” rollout without understanding the technology’s potential impact on users and India’s monetary policy. “Such understanding would emerge from the generation of user data in pilots. The actual introduction of CBDC can be phased in gradually,” Das said.
Still, he had expressed confidence in CBDC’s potential to “underpin the payment systems of the future,” both for domestic and cross-border payments.
‘Real AI revolution is yet to come’
The true AI revolution is still on the horizon, with the technology set to have an even bigger impact on the world’s economy going forward, according to Yann LeCun, Meta’s Chief AI Scientist.
Speaking at the 2024 K-Science and Technology Global Forum in Seoul, hosted by South Korea’s science ministry, LeCun emphasised the transformative potential of AI while cautioning against hasty regulations that could stifle innovation.
“The real AI revolution has not yet arrived,” LeCun stated during his opening speech, adding that AI is poised to redefine how humans interact with technology. “In the near future, every single one of our interactions with the digital world will be mediated by AI assistants,” he said, envisioning systems with intelligence on par with humans.
While acknowledging the advances brought by generative AI models like OpenAI’s ChatGPT and Meta’s Llama, LeCun highlighted their limitations. “LLMs [large language models] can deal with language because it is simple and discrete, but it cannot deal with the complexity of the real world,” he explained. These systems lack the ability to reason, plan and understand the physical world in the same way humans do.”
To bridge these gaps, LeCun revealed Meta’s efforts to develop a new AI architecture capable of observing and learning from the physical world, similar to how babies interact with their environment. This objective-driven AI aims to build predictions and understand real-world complexities, paving the way for a more sophisticated generation of AI.
However, he warned that premature regulation could stifle innovation in this area. “Regulation can kill open source,” he said, urging governments to avoid restrictive laws that could hinder technological progress. He emphasised that no AI system has been shown to be inherently dangerous, suggesting that concerns about AI risks should not derail development.
