Mumbai: Reserve Bank of India has tweaked its rules to promote innovations through a `regulatory sandbox’. The new framework will enable on-tap proposals, replacing the previous structure in which the central bank presented challenges to a cohort of technology firms and required them to devise solutions within a specified time frame.
“The framework has been revised based on the experience gained over the last four and half years in running four cohorts and feedback received from FinTechs, banking partners and other stakeholders,” RBI said.
Among others, the timelines of the various stages of the Regulatory Sandbox process have been revised from seven months to nine months. The updated framework also requires sandbox entities to ensure compliance with provisions of the Digital Personal Data Protection Act, 2023.
The new sandbox framework comes in the wake of the RBI governor, Shaktikanta Das, stating that the RBI remained committed to supporting innovation and technology in the financial sector.
The governor reaffirmed the commitment to innovation after criticism from some quarters that the RBI’s strict stance on Paytm Payments Bank, due to its failure to comply with RBI norms, might stifle innovation.
A regulatory sandbox is a controlled environment provided by regulatory authorities where businesses can test innovative products, services, or business models in a live market environment under regulatory supervision. Banks are allowed to provide access to their systems for these new ideas which are developed in the nature of a pilot project.
“The framework has been revised based on the experience gained over the last four and half years in running four cohorts and feedback received from FinTechs, banking partners and other stakeholders,” RBI said.
Among others, the timelines of the various stages of the Regulatory Sandbox process have been revised from seven months to nine months. The updated framework also requires sandbox entities to ensure compliance with provisions of the Digital Personal Data Protection Act, 2023.
The new sandbox framework comes in the wake of the RBI governor, Shaktikanta Das, stating that the RBI remained committed to supporting innovation and technology in the financial sector.
The governor reaffirmed the commitment to innovation after criticism from some quarters that the RBI’s strict stance on Paytm Payments Bank, due to its failure to comply with RBI norms, might stifle innovation.
A regulatory sandbox is a controlled environment provided by regulatory authorities where businesses can test innovative products, services, or business models in a live market environment under regulatory supervision. Banks are allowed to provide access to their systems for these new ideas which are developed in the nature of a pilot project.
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