RBI Opens Applications To Its First Cohort Under The Regulatory Sandbox

In a crucial move that will impact the way financial service providers innovate and how regulators respond to innovation, the Reserve Bank of India ("RBI") has called for applications to its first cohort of entities under its newly announced Regulatory Sandbox ("RBI RS") under the theme 'Retail Payments'.

Salient Features of the Proposal

To ensure regulatory response to the dynamics of the financial technology and digital banking sector, the RBI set up a Working Group to review global regulatory initiatives in the sector. One of the key recommendations of the Working Group was to set up of a "regulatory sandbox", which it described as 'live testing of financial services in a controlled testing environment, with or without regulatory relief'.