The 1st cohort of RBI’s regulatory sandbox program has completed test phase


The Reserve Bank said on Monday that six firms in the ‘First Cohort’ of the Regulatory Sandbox scheme with retail payments as a theme had passed the test phase and that their products are viable for adoption by regulated entities.

Offline digital payments, prepaid cards, contactless payments, and voice-based UPI are the major topics of their goods.

A regulatory sandbox is a controlled/test regulatory environment in which regulators may (or may not) allow certain relaxations for the restricted purpose of testing new products or services.

Among the companies whose products were found to meet the RBI’s standards in the First Cohort are Nucleus Software Exports (Paytm), Tap Smart Data Information Services (Citycash), Natural Support Consultancy Services (IND-e-Cash), Naffa Innovations (ToneTag), Ubona Technologies (BHIM Voice), and Eroute Technologies (offline payment using SIM).

The RBI stated that “all the products have been found viable within the boundary conditions defined during testing under the Regulatory Sandbox,” adding that “all the products have been found viable within the boundary conditions defined during testing under the Regulatory Sandbox.”

The First Cohort of the Regulatory Sandbox on ‘Retail Payments’ has now been completed, according to the RBI.

It stated that “the items found acceptable under this Cohort may be evaluated for adoption by regulated companies subject to conformity with applicable regulatory requirements.”

The RBI said it received 27 applications from 26 businesses for the ‘Second Cohort’ of cross-border payments, of which eight were chosen for the ‘Test Phase.’

Book My Forex, Cashfree Payments, Fairex Solutions, Flyremit, Nearby Technologies, Open Financial Technologies, SoCash India, and Wall Street Finance are among the companies that have been chosen.

From the third week of September 2021, these organizations will begin testing their products.

The theme for the Regulatory Sandbox’s ‘Third Cohort’ will be ‘MSME Lending,’ and companies interested in participating can submit applications to the RBI from October 1, 2021, through November 14, 2021, according to the RBI.

The Regulatory Sandbox allows regulators, innovators, financial service providers, and customers to perform field testing to gather evidence on the benefits and dangers of new financial products.

The Regulatory Sandbox’s goal is to promote responsible financial services innovation, increase efficiency, and benefit customers.

The first and most important benefit of a regulatory sandbox, according to the RBI, is that it encourages all parties to learn by doing. The Regulatory Sandbox could help consumers by expanding the range of products and services available, lowering costs, and improving access to financial services, among other things.

Fintech enterprises, including startups, banks, financial institutions, and any other company, Limited Liability Partnership (LLP), and partnership firms, partnering with or giving support to financial services organizations, are the target candidates for admittance into the Regulatory Sandbox.

With the theme of ‘Cross Border Payments,’ the RBI invited applications for the ‘First Cohort’ in November 2019 and the ‘Second Cohort’ in December 2020.

It was also revealed in December 2020 that the Third Cohort’s topic would be “MSME Lending.”

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