Companies and banks which are incorporated or licensed to operate in India with a net worth of at least 2.5 million rupees will be allowed to apply to the Reserve Bank of India to test their financial technology services in a regulatory sandbox.
The central bank said in its final framework for a regulatory sandbox for innovation in financial services, released Aug. 13, that it will consider applications from products that aim at improving financial inclusion, as well as from sectors such as payments, lending and digital know-your-customer.
However, financial technology on credit information and registry and crypto-related products will not be eligible for the sandbox, it added.
The testing period in the sandbox will likely be fewer than six months, the central bank said.
The central bank noted that applicants should state how their products fill in gaps in the current financial ecosystem, and how current regulations prevent their products from scaling up. Applicants will also be required to share the results of proof of concept and submit a mitigation plan for any significant risks arising from the proposed solution.
As of Aug. 13, US$1 was equivalent to 70.93 Indian rupees.