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 (RS) ecosystem. Within the sandbox, the eligible entities can live test their innovative products or services in a controlled environment.

RS 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. The Enabling Framework was further updated on December 16, 2020 and October 08, 2021, incorporating the learnings from the previous cohorts.

The RS is based on thematic cohorts. The themes of the various cohorts under RS are as given below:

I. Retail Payments

II. Cross Border Payments

III. MSME Lending

IV. Prevention and Mitigation of Financial Frauds

V. Theme Neutral – Here innovative products/ services/ technologies cutting across various functions in RBI’s regulatory domain would be eligible to apply.

Further to ensure continuous innovation in the closed themes, the RS also accepts ‘On Tap’ applications for the closed themes. At present, themes of first two cohorts (viz. Retail Payments and Cross Border Payments) are open for ‘On Tap’ applications.