Current Affairs

RBI to Issue Guidelines for Setting up of a Regulatory Sandbox

The Reserve Bank of India (RBI) will be issuing guidelines within two months for the fintech companies to test their new products on a small group of users before scaling up.
RBI to Issue Guidelines for Setting up of a Regulatory Sandbox
  • This Regulatory Sandbox will help fintech companies to launch innovative products at a lower cost and in less time and enable fintech companies to conduct live or virtual testing of their new products and services.

What is a Sandbox?

  • A Sandbox is a framework set up by a regulator that allows FinTech start-ups to conduct live experiments in a controlled environment under supervision.

Benefits of a Regulatory Sandbox:

  • Regulatory Sandbox will provide a well-defined space for the companies to develop new products.
  • Regulatory Sandbox allows for experimenting with their products and fintech solutions. In case of failure, the consequences would be contained and the reasons will be analysed for betterment.
  • Regulatory Sandbox would benefit FinTech companies by way of reduced time to launch innovative products at a lower cost.

One must know:

  • The RBI's working group on FinTech and digital banking in 2017 had recommended that a regulatory sandbox/innovation hub be introduced within a well-defined space and duration to experiment with FinTech solutions, where the consequences of failure can be contained and reasons for failure analysed.

Question:

Q. What will the RBI setup for the fintech companies to test their new products on a small group of users before scaling up?
a. Regulatory Sandbox

b. Regulatory Finbox
c. Regulatory Techbox
d. Regulatory Testbox
RBI to Issue Guidelines for Setting up of a Regulatory Sandbox RBI to Issue Guidelines for Setting up of a Regulatory Sandbox Reviewed by Shweta Kashyap on March 30, 2019 Rating: 5

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