RBI updates framework for its fintech sandbox, extends certain process timelines.
Reserve Bank of India has updated the ‘Enabling Framework for Regulatory Sandbox’, increasing the timelines for various stages of the sandbox process and allowing applicants to enter into in-principle partnerships before applying for the sandbox.
The updates are based on the experience gained over the last four and half years in running four cohorts and feedback received from fintechs, banking partners and other stakeholders, the central bank said in a release, adding that the updated framework also requires sandbox entities to ensure compliance with provisions of the Digital Personal Data Protection Act, 2023.
Under the revised framework, the central bank has revised the timelines for various stages of the Sandbox process to nine months from seven months, and has allowed entities to enter into “in-principle partnership arrangements, if any, with various stakeholders” at the time of applying for the sandbox.
It also added that in case a proposed product or service is similar to one already tested under the Regulatory Sandbox and “no new innovation is envisaged”, RBI may choose to not consider the same as eligible under the sandbox.
The original framework for the Regulatory Sandbox was issued in August 2019 and has since been updated twice before to foster responsible innovation in financial services, promote efficiency and bring benefit to consumers. This included reducing the minimum net worth requirement for applicants to Rs 10 lakh from Rs 25 lakh earlier and the addition of products and services pertaining to regulatory and supervisory technology.