Inviting comments on draft regulatory sandbox framework by RBI

The Reserve Bank of India (RBI) has proposed to set up regulatory sandboxes where startups can test new products, services or business models with customers in a live environment, subject to certain safeguards and oversight. According to the draft consultation paper released by the central bank last week, the focus of these sandboxes will be to encourage innovations where there is absence of governing regulations; there is a need to temporarily ease regulations for enabling the proposed innovation; and the proposed innovation shows promise of easing/effecting delivery of financial services in a significant way.

While these sandboxes have been mandated to focus on thematic cohorts such as financial inclusion, payments and lending, digital KYC; any product/services which have been banned by the regulators or the government, including crypto currency/crypto assets services have strictly been discouraged.

The benefits of regulatory sandboxes can be summarized as follows:

  • It fosters ‘learning by doing’ for both regulators and service providers as it enables them to obtain first-hand empirical evidence on the benefits and risks of emerging technologies.
  • Allows to test the product’s viability without the need for a larger and more expensive roll-out.
  • Accelerate financial inclusion in areas such as microfinance, innovative small savings and micro-insurance products, remittances, mobile banking and other digital payments.
  • Leads to better outcomes for consumers through an increased range of products and services, reduced costs and improved access to financial services.

However, the testing, will be for a limited set of customers, and only 10-12 companies. These companies will only be permitted to use the sandboxes once they meet the eligibility criteria set by the RBI.

NASSCOM over the years has been advocating the need to promote technological innovations by fintech companies. We are hopeful that this consultation process will help in addressing the concerns of the industry pertaining to this issue.

The last date for sending comments to RBI is 8th May 2019. You are therefore requested to kindly mail us your inputs /responses latest by 30th April 2019 for us to finalize and make timely submission to the central bank.  Kindly send your inputs to and .

Link to the consultation paper:

We look forward to your response.



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