The Reserve Bank of India (RBI), last month, released a draft of the “Enabling Framework for Regulatory Sandbox”. A sandbox is a framework that allows regulation to evolve and keep pace with innovation in technology. Fintech startups can live test new products and technologies within the RBI’s regulatory sandbox which offers a controlled regulatory environment allowing for “learning by doing” for startups, customers and the regulator. A key benefit of a regulatory sandbox is to enable regulators to make decisions based on evidence from real-time product testing and customer experience.
Partner
Shardul Amarchand Mangaldas & Co.
Who is eligible?
Startups (defined as a company in business for no more than seven years) will be selected for the regulatory sandbox based on identified eligibility criteria, including net worth of at least ₹500,00, satisfactory credit scores, promoters and directors that meet the fit and proper criteria, the ability to comply with personal data protection laws and adequate IT infrastructure and safeguards to protect against unauthorized access, destruction and disclosure.
The sandbox is intended to allow for testing of products and technology that are not currently governed by regulations and face some form of regulatory barrier in implementation, those that require certain regulatory relaxations for testing, and those that seek to improve the delivery of financial services. The RBI has indicated that the solution proposed for sandboxing must highlight an existing gap in the financial ecosystem and specifically address how this can be solved. While the eligibility criteria are product and technology focused, the startup requirement potentially excludes a large section of Fintech players. The RBI may need to re-look at the seven-year rule for eligibility.
You must be a
subscribersubscribersubscribersubscriber
to read this content, please
subscribesubscribesubscribesubscribe
today.
For group subscribers, please click here to access.
Interested in group subscription? Please contact us.
你需要登录去解锁本文内容。欢迎注册账号。如果想阅读月刊所有文章，欢迎成为我们的订阅会员成为我们的订阅会员。
Shilpa Mankar Ahluwalia is a partner at Shardul Amarchand Mangaldas & Co. and leads the firm’s Fintech practice.
Shardul Amarchand Mangaldas & Co.
Amarchand Towers
216 Okhla Industrial Estate, Phase 3
New Delhi – 110 020
Executive Chairman: Shardul Shroff
Managing Partners:
Pallavi Shroff & Akshay Chudasama
Contact details
Tel:+91 11 4159 0700, 4060 6060
Email: Connect@AMSShardul.com
New Delhi | Mumbai | Gurugram | Chennai | Bengaluru | Ahmedabad | Kolkata
