RBI will issue guidelines soon for fintech companies to test their new products on a small group of users before scaling up.
RBI governor Shaktikanta Das said the “regulatory sandbox” will help fintech companies launch innovative products at a lower cost and in less time. The sandbox will enable fintech companies to conduct live or virtual testing of their new products and services.
These companies will also be able to test the viability of the product without a wider and expensive rollout.
“The Reserve Bank’s working group on fintech and digital banking…suggested the introduction of a ‘regulatory sandbox/innovation hub’ 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,” Das said.
In order to protect customers and safeguard the interests of all stakeholders, and streamline their influence on the financial system, the governor stressed on the need for a regulatory and supervisory framework for fintech firms.