Mumbai, Aug. 20 -- Regulators in the financial sector must strike a balance between fostering innovation and safeguarding stability, according to central bank deputy governor M. Rajeshwar.

"While it is necessary to minimise systemic risks and protect consumers, it should not discourage creativity, innovation, or healthy market dynamics," Rao said at the inaugural session of the Department of Personnel and Training and Management Development Programme (DoPT MDP) on Financial Market Regulations at the Indian Institute of Management Kozhikode (IIMK) on Tuesday. The speech was uploaded on the Reserve Bank of India (RBI) website on Wednesday.

Rao said while innovation has transformed the financial sector, it has also created regulatory grey ...