##ms ) services 24 * 7 * 365. these two services serve as the backbone for indian financial system. they also enable neft and rtgs payment transactions. iftas also provides cloud - based solutions like mobile wallets and mobile banking for several banks. rebit also provides assistance in implementation of it projects of rbi and cybersecurity assessment of entities supervised by the rbi. fintech department in rbi in 2022 ; and ( vi ) establishment of the reserve bank innovation hub ( rbih ) to promote innovation in financial services. c. policy initiatives 12. timely and appropriate policy initiatives play a crucial role in shaping the development of the fintech sector. the focus of our policy initiatives is to promote a conducive environment for innovation and also ensure the security and stability of financial services. we have taken many such policy initiatives in the recent times. they include issuance of regulatory guidelines for emerging areas such as payments banks ( 2014 ), account aggregators ( aa ) ( 2016 ), pre - paid instruments ( 2017 ), peer - to - peer ( p2p ) lending ( 2017 ), invoice discounting ( trade receivable and discounting system - treds ) ( 2018 ), and digital lending guidelines ( 2022, 2023 ). incidentally, the cumulative number of consent - based information sharing through account aggregators has reached 15. 65 million in july 2023. with entities from insurance, capital markets and pension funds joining the aa framework, it is receiving a lot of traction. 13. the regulatory sandbox framework was announced in august 2019 with a view to foster responsible innovation and promote efficiencies in financial services. the four cohorts on retail payments, cross border payments, msme lending and prevention of financial frauds, together with the neutral fifth cohort, reflect our commitment to promote innovation in the fintech space. drawing upon the learnings from the first cohort of regulatory sandbox, rbi has put in place a ‘ framework for facilitating small value digital payments in offline mode ’ which should give a push to digital transactions in areas with poor or weak internet or telecom connectivity. 14. further, rbi is now conducting hackathons to promote innovation. our first hackathon, harbinger was conducted in 2021 under the broad theme - ‘ smarter digital payments ’. the second edition of our global hackathon – ‘ harbinger 2023 ’ – has also been launched with the theme ‘ inclusive digital services

determined haircut as part of restructuring. iv. the fiscal dimension 22. the success and credibility of all the resolution efforts detailed above would be critically contingent on the strength of the public sector balance sheets to absorb the costs. it is clear that psbs will need to take haircuts on current exposures under any resolution plan agreed within or outside the ibc. higher provisioning requirements, on this count as well as other factors, will affect the capital position of several banks. this would necessitate a higher recapitalisation of the public sector banks. the government and the reserve bank are in dialogue to prepare a package of measures to enable psbs to shore up requisite capital in a time - bound manner. the measures could include a combination of capital raising from the market ; dilution of government holdings ; additional capital infusion by the government ; mergers based on strategic fit ; sale of non - core assets etc. v. conclusion and way forward 23. the multi - pronged approach outlined above is an on - going process. the early signs are encouraging. however, we all must realise that it will be a long haul before the intended objectives are fully achieved. there could be initial glitches and unanswered questions but these will get resolved as the process advances. the ibc process itself will evolve as case history of various nclt / nclat judgements build up. 24. the contours of the approach to be adopted for other non - performing accounts are being worked through. we must, however, stress that the exercise of powers by the rbi vested in sections 35 aa and 35 ab cannot be a regular, steady state approach. the lenders have been adequately empowered under the ibc to take necessary action upon default. it is now incumbent upon all lenders to effectively leverage these powers through proactive, timely references under ibc on their own. 25. even under ibc, huge responsibility is cast upon the committee of creditors to agree to a viable restructuring plan in each admitted case within the prescribed timelines. the creditors, in particular banks, will need to devote adequate resources and strengthen internal processes to focus on these cases as the number is only going to go up. 26. in conclusion, i must reiterate the intent and resolve on the part of the government and the regulators to collectively address the problem of stressed assets in the system. there are pains and costs to be borne, but as long as the end - game is a desirable goal