The Reserve Bank of India (RBI), the central bank of the country, has issued the final ‘Enabling Framework for Regulatory Sandbox’ after the completion of the consultation period.
The move is aimed to facilitate innovation and bring in efficiency in financial services sector.
The regulatory sandbox (RS) will enable financial institutions and fintech companies to carry out live testing of new products and services in a controlled and regulated environment.
Accordingly, it will help companies to procure evidence on the benefits and risks of the products, before their actual launch.
RBI noted that the products to be launched under the RS should include new or emerging technology. It may also use existing technology in an innovative way to provide additional benefits to consumers.
The central bank placed the draft on its website in April this year and sought feedback from the stakeholders.
In your opinion, what presents the biggest operational challenge for FS providers in the COVID-19 crisis?
- Switching to large scale homeworking (51%, 162 Votes)
- Retraining the staff (32%, 102 Votes)
- Changing operating hours of branches and call centres (17%, 54 Votes)
Total Voters: 318
It received feedback from 69 stakeholders, which were considered before finalising the enabling framework for regulatory sandbox. It also considered suggestions published in 17 newspaper reports.
Banks, fintech companies, startups and other stakeholders in the financial services businesses can apply for entry in the RBI regulatory sandbox.
However, the applicants must be incorporated and registered in India. They should also have a minimum net worth of INR2.5m as per their latest audited balance sheet.
The products/services which will be considered for testing include retail payments, marketplace lending, digital KYC and wealth management among others.
The selected applicants can also test technologies involving data analytics, block chain, and application program interface (APIs) services.
However, credit registry, credit information and crypto currency have been excluded from the list.