REGULATORY SANDBOX
- November 18, 2020
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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Subject : Economy
Context : Testing of products under the RBI’s regulatory sandbox, which was delayed on account of COVID-19 pandemic, has commenced, with two entities starting the ‘test phase’ with their products.
Concept :
- The central bank had announced opening of the first cohort under regulatory sandbox, with ‘Retail Payments’ as its theme, in November last year.
- It had received applications from 32 entities, of which six were selected for the ‘test phase’.
- Regulatory sandbox usually refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may (or may not) permit certain relaxations for the limited purpose of the testing.
- The regulatory sandbox allows the regulator, innovators, financial service providers and customers to conduct field tests to collect evidence on the benefits and risks of new financial innovations.
- The objective of the regulatory sandbox is to foster responsible innovation in financial services, promote efficiency and bring benefit to consumers.