The Federal Reserve Bank of India (RBI) on September 18 announced the opening of the third cohort of regulatory sandbox with its theme as MSME lending, the financial institution said during a statement.
The application for the Third Cohort could also be submitted from October 01, 2021, to November 14, 2021, the RBI said within the statement.
To encourage innovations RBI had unrolled regulatory sandbox framework on August 13, 2019. Regulatory sandbox refers to measure testing of latest products or services during a controlled/regulatory environment that regulators may or might not pertain certain regulatory relaxations.
The sandbox allows regulator, innovator, financial services providers and customers to conduct field tests to gather evidence on benefits and risks of latest financial innovations while carefully monitoring and containing risks.
The first cohort for regulatory sandbox was under the theme of retail payments where RBI had received 32 applicants and only six had been selected for the test phase.
In its second cohort under regulatory sandbox the RBI had announced ‘Cross-border Payments’ as its theme.
On December 16, 2020, the RBI had eased the eligibility norms for applications under sandbox. ”To encourage innovation and broad base the eligibility criteria, the enabling framework has been modified by reducing net worth requirement from the prevailing ₹25 lakh to ₹10 lakh, as also including Partnership firms and indebtedness Partnership (LLPs) to participate within the RS,” RBI said during a release on December 16, 2020.
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