The Reserve Bank of India (RBI) will be issuing guidelines within two months for the fintech companies to test their new products on a small group of users before scaling up.
a. Regulatory Sandbox
b. Regulatory Finbox
- This Regulatory Sandbox will help fintech companies to launch innovative products at a lower cost and in less time and enable fintech companies to conduct live or virtual testing of their new products and services.
What is a Sandbox?
- A Sandbox is a framework set up by a regulator that allows FinTech start-ups to conduct live experiments in a controlled environment under supervision.
Benefits of a Regulatory Sandbox:
- Regulatory Sandbox will provide a well-defined space for the companies to develop new products.
- Regulatory Sandbox allows for experimenting with their products and fintech solutions. In case of failure, the consequences would be contained and the reasons will be analysed for betterment.
- Regulatory Sandbox would benefit FinTech companies by way of reduced time to launch innovative products at a lower cost.
One must know:
- The RBI's working group on FinTech and digital banking in 2017 had recommended that a regulatory sandbox/innovation hub be introduced within a well-defined space and duration to experiment with FinTech solutions, where the consequences of failure can be contained and reasons for failure analysed.
Question:
Q. What will the RBI setup for the fintech companies to test their new products on a small group of users before scaling up?a. Regulatory Sandbox
b. Regulatory Finbox
c. Regulatory Techbox
d. Regulatory Testbox
d. Regulatory Testbox
