The AchieVer Posted April 19, 2019 Share Posted April 19, 2019 Fintech startups can test regulatory sandbox: RBI draft A regulatory sandbox is a controlled environment for commercial testing of new technology with limited regulations and customer exposureETtech The Reserve Bank of India on Thursday released a draft of fintech regulatory sandbox framework for stakeholder comments. The draft proposes that fintech startups could participate in a sandbox monitored by RBI to provide fresh industry solutions in tech services such as retail payments, digital KYC and remittance services, among others. A regulatory sandbox (RS) is a controlled environment for commercial testing of new technology with limited regulations and customer exposure. The RBI's draft for fintech RS is based on the recommendations of an inter-regulatory working group constituted in July 2016. "One of the key recommendations of the group was to introduce an appropriate framework for a regulatory sandbox... to increase efficiency, manage risks and create new opportunities for consumers," RBI said. The draft in detail proposes application criteria and design framework for fintech startups wishing to participate in the RS. The proposed sandbox would start its first phase by featuring 10-12 Indian startups, above a net worth of 50 lakh and with requisite IT infrastructure only "if the proposed FinTech solution should highlight an existing gap in the financial ecosystem and demonstrate how it would address the problem," according to the draft. The central bank said that it is looking to promote a system of "learning by doing" on all sides: from companies to regulators and even consumers. "Regulators obtain first-hand empirical evidence on the benefits and risks of emerging technologies and their implications" the central bank said. The regulators said that the technologies innovations in mobile payments, data analytics, API services, blockchain, artificial intelligence and machine learning would be given major impetus for the RS. However, solutions which are already being tested by the central bank such as credit registry, credit information, crypto services, among others, would not be considered for the proposed sandbox. The central bank has set a deadline May 8, 2019, for stakeholder comments on the released draft after which the RBI would release the final guidelines. Source Link to comment Share on other sites More sharing options...
The Reserve Bank of India on Thursday released a draft of fintech regulatory sandbox framework for stakeholder comments. The draft proposes that fintech startups could participate in a sandbox monitored by RBI to provide fresh industry solutions in tech services such as retail payments, digital KYC and remittance services, among others. A regulatory sandbox (RS) is a controlled environment for commercial testing of new technology with limited regulations and customer exposure. The RBI's draft for fintech RS is based on the recommendations of an inter-regulatory working group constituted in July 2016. "One of the key recommendations of the group was to introduce an appropriate framework for a regulatory sandbox... to increase efficiency, manage risks and create new opportunities for consumers," RBI said. The draft in detail proposes application criteria and design framework for fintech startups wishing to participate in the RS. The proposed sandbox would start its first phase by featuring 10-12 Indian startups, above a net worth of 50 lakh and with requisite IT infrastructure only "if the proposed FinTech solution should highlight an existing gap in the financial ecosystem and demonstrate how it would address the problem," according to the draft. The central bank said that it is looking to promote a system of "learning by doing" on all sides: from companies to regulators and even consumers. "Regulators obtain first-hand empirical evidence on the benefits and risks of emerging technologies and their implications" the central bank said. The regulators said that the technologies innovations in mobile payments, data analytics, API services, blockchain, artificial intelligence and machine learning would be given major impetus for the RS. However, solutions which are already being tested by the central bank such as credit registry, credit information, crypto services, among others, would not be considered for the proposed sandbox. The central bank has set a deadline May 8, 2019, for stakeholder comments on the released draft after which the RBI would release the final guidelines. Source
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