The Reserve Bank of India (RBI) Governor Shaktikanta Das said that RBI will, in the next two months, release the guidelines for the creation of a ‘regulatory sandbox’ for the fintech sector.
Background:
Original Meaning: The word sandbox originally referred to the small box filled with sand where children play and experiment in a controlled environment. But gradually, the term has acquired new meanings.
Meaning in the computer science world: A sandbox is a closed testing environment designed for experimenting safely with web or software projects.
Regulatory sandboxes:
The concept is also being used in the digital economy arena, to refer to regulatory sandboxes.
These are testing grounds for new business models that are not protected by current regulation, or supervised by regulatory institutions.
A regulatory sandbox is a controlled mechanism within which the sector will be able to experiment with solutions in a closely-monitored ecosystem so that the risks do not spread outside it, and the reasons for failure can be analysed.
Benefits: A regulatory sandbox would benefit fintech firms by way of reduced time to launch innovative products at a lower cost.
Dear Student,
You have still not entered your mailing address. Please enter the address where all the study materials will be sent to you. (If applicable).
