What Is Regulatory Sandbox (RS)?
The Reserve Bank of India (RBI) revised the timeline for the completion of various stages of a Regulatory Sandbox (RS) to nine months from the previous seven months.
- A Regulatory Sandbox (RS) refers to live testing of new products or services in a controlled regulatory environment for which regulators may or may not permit certain regulatory relaxations for the limited purpose of testing.
- The RS is an important tool that enables more dynamic, evidence-based regulatory environments which learn from and evolve with, emerging technologies.
- It enables the regulator, financial service providers and customers to conduct field tests to collect evidence on the benefits and risks of new financial innovations while monitoring and containing their risks.
- The objective of the RS is to foster responsible innovation in financial services, promote efficiency and bring benefit to consumers.
- It can provide a structured avenue for the regulator to engage with the ecosystem and to develop innovation-enabling or innovation-responsive regulations that facilitate delivery of relevant, low-cost financial products.
