RBI launches regulatory sandbox for Fintech companies

RBI issued the final framework for regulatory sandbox (RS) for the startups, banks and financial institutions. The Fintech companies can now set up their own RS for live testing of innovative products
Akarsh Phanindra

Updated: Aug 14,2019 12:27:06 pm

RBI launches regulatory sandbox for Fintech companies

14 August 2019 Current Affairs:The Reserve Bank of India (RBI) issued the final framework for regulatory sandbox (RS) for the startups, banks and financial institutions. The Fintech companies can now set up their own RS for live testing of innovative products in areas like retail payments, digital KYC and wealth management. 

Aim:
The framework aims to enable innovations in the financial technology space. It will also foster responsible innovation in financial services, promote efficiency and bring benefit to consumers.
It will encourage innovations that are intended for use in the Indian market in areas where there is absence of governing regulations.

Eligibility to enter RS:
Fintech companies including startups, banks, financial institutions and any other company partnering with or providing support to financial services businesses.

Guidelines:
As per the guidelines:

Mobile technology applications, data analytics, application program interface (APIs) services, applications under block chain technologies, and artificial intelligence and machine learning applications can also be considered for testing under RS. 
The sandbox entity should ensure that any existing obligations to the customers of the financial service under experimentation are fulfilled or addressed before exiting or discontinuing the RS.

Regulatory Sandbox (RS):
A regulatory sandbox refers to live testing of new products or services in a controlled/test regulatory environment. The regulators can permit certain regulatory relaxations for the limited purpose of the testing.
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