With Regulatory Sandbox, RBI Looks to Create Innovation Test Lab For Fintech
19 April 2019 4:51 AM GMT
After successful sandbox testing, fintech startups may still need regulatory approvals before their products, services, or technology can be permitted for wider application.
- Acknowledging the recent innovations by fintech startups, the Reserve Bank of India (RBI) has now released a draft 'Enabling Framework for Regulatory Sandbox' that will allow fintech startups to test within a regulatory sandbox (RS).
- After successful sandbox testing, fintech startups may still need regulatory approvals before their products, services, or technology can be permitted for wider application, according to the draft.
- A regulatory sandbox refers to live testing of new products or services in a controlled or regulatory test environment for which regulators may (or may not) permit certain relaxations for the duration of testing.
- According to the draft, the sandbox will allow regulators, innovators, financial service providers (as potential deployers of the technology) and customers (as end users) to conduct field tests with the objective of collecting evidence on the benefits of new financial innovations, while also carefully monitoring and containing their risks.
- With this RBI looks to provide an environment to fintech startups for limited-scale testing of a new product or service before a wider-scale launch.
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