RBI to set up a regulatory sandbox for Fintech startups
To promote innovation in FinTech space, the Reserve Bank of India (RBI) has decided to set up a Regulatory Sandbox for Fintech Startups. The central bank will issue guidelines within two months for fintech companies to test their new products on a small group of users before scaling up. The sandbox will enable fintech companies to conduct live or virtual testing of their new products and services. It will also benefit fintech companies by way of reduced time to launch innovative products at a lower cost. These companies will also be able to test the viability of the product without a wider and expensive rollout. A regulatory sandbox is a framework set up by a regulator that allows FinTech startups to conduct live experiments in a controlled environment under supervision. Fintech (or financial technology) companies use technology to provide financial services such as payments, peer-to-peer lending and crowdfunding, among others.