Fintech

Introduction

To enable regulated and orderly growth of FinTech ecosystem in India, the Reserve Bank in August 2019 became one of the few countries that have their very own regulatory sandbox ecosystem. Within the sandbox, the eligible entities can live test their innovative products or services in a controlled environment. This is a collaboration between the regulator, the innovators, the financial service providers and the end users which would ensure that Indian consumers continue to receive the best in class financial services.

The Regulatory Sandbox was established based on the recommendations of Working Group on FinTech and Digital Banking, set up by Financial Stability and Development Council - Sub Committee (FSDC-SC). After extensive stakeholder consultations, the final Enabling Framework for the Regulatory Sandbox (RS) was placed on the RBI website on August 13, 2019. This was followed by announcement of ‘Retail Payments’ as theme of the first cohort. The Enabling Framework was further updated on December 16, 2020, incorporating the learnings during implementation of first cohort. Further, the second cohort with the theme ‘Cross Border Payments’ was also opened for application. It was also communicated that the theme for third cohort shall be ‘MSME Lending’.