RBI releases draft “Enabling Framework for Regulatory Sandbox”

Apr 19, 2019 | by Avantis RegTech Legal Research Team


The Reserve Bank of India (RBI) on April 18, 2019 releases the draft “Enabling Framework for Regulatory Sandbox”. A regulatory sandbox (RS) usually refers to live testing of new products or services in a controlled or test regulatory environment for which regulators may permit certain regulatory relaxations for the limited purpose of the testing. It helps to conduct field tests to collect evidence on the benefits and risks of new financial innovations, while carefully monitoring and containing their risks. The RS is potentially an important tool which enables more dynamic, evidence-based regulatory environments which learn from, and evolve with, emerging technologies. 

The objectives of RS are:

•The RS provides an environment to innovative technology-led entities for limited-scale testing of a new product or service that may or may not involve some relaxation in a regulatory requirement before a wider-scale launch.

•The RS is a formal regulatory programme for market participants to test new products, services or business models with customers in a live environment, subject to certain safeguards and oversight.

•The proposed financial service to be launched under the RS should include new or emerging technology, or use of existing technology in an innovative way and should address a problem, or bring benefits to consumers.

RBI invites comment on the draft guidelines from stakeholders by May 08, 2019. The comments or feedback on the draft framework may be sent by email or to the address: Chief General Manager-in-Charge, Department of Banking Regulation, RBI office, Central Office, 12th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai-400001.

[Press Release: 2018-2019/2485]

Click here to download the Press Release.

 


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