RBI proposed Fintech Startups to use Regulatory Sandbox
Image Source: Shutterstock

The Reserve Bank of India (RBI) has announced that it will issue guidelines for fintech companies to beta test their products on a small group of users within the next two months. The RBI governor Shaktikanta Das noted that the “regulatory sandbox” will enable the launch of novel products at a cheaper and time efficient manner.

The sandbox will allow companies to test the product without the burden of an exhaustive wider roll-out.

“The Reserve Bank’s working group on fintech and digital banking suggested the introduction of a ‘regulatory sandbox/innovation hub’ 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,” said Das.

Also Read: India beats China in fintech funding in March quarter

The sandbox will work as a tool to safeguard the stakeholders and the customers. It will also streamline the influence these companies will have on the financial system. The governor pointed out the need for a regulatory and supervisory system for fintech companies.

The governor’s concerns are not misplaced since the Indian fintech ecosystem is the 3rd largest in the world, roping in approximately $6 billion in investments in the last five years.

Governor Das is encouraging banks to form new alliances with fintech companies in an effort to further drive the financial inclusion agenda. He stated that India is ranked 2nd with respect to fintech adoption at a rate of 52%, which has led to the inception of 1,218 companies.

As per the governor, the retail electronic payments have gone up by 900% in the last five years. This led the BJP government to increase the effort to develop payments infrastructure and technology platforms such as Immediate Payments Services (IMPS), Unified Payment Interface (UPI), and Bharat Interface for Money (BHIM).

“The National Electronic Fund Transfer (NEFT) handled 195 crore transactions which have grown by 4.9 times in terms of volume and 5.9 times in terms of value over the last five years,” said the governor.

You May Also Like

Role of Technology in the Era of COVID-19 Pandemic

Technology will not be able to avoid the onset of a pandemic;…

How to Use the New Jeevan Pramaan Face Recognition App?

On Monday, the Union Minister, Shri. Jitendra Singh introduced the unique mobile…
Aadhaar Update

UIDAI Introduces a New Service—“Order Aadhaar Card”

UIDAI has launched “Order Aadhaar Card” service. With the help of this…

How to Buy and Use Digital Rupee in India

Digital Rupee or e-Rupee is a central bank digital currency (CBDC)—a digital…