The selected entities will begin testing their products in February.(File)
Mumbai:
Six entities, including HSBC and Creditwatch, have been allowed to test their fintech products to prevent and reduce financial fraud as part of the fourth cohort under the RBI’s regulatory sandbox scheme.
Regulatory sandbox refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may allow certain relaxations.
The Reserve Bank announced the opening of the fourth cohort under the regulatory sandbox in June 2022 for the prevention and combating of financial fraud.
The RBI said it had received nine applications under the fourth cohort, of which six units have been selected for the “test phase”.
The six entities are – Bahwan Cybertek, Crediwatch Information Analytics, enStage Software (Wibmo), HSBC in partnership with Wibmo, napID Cybersec and Trusting Social.
The selected units will begin testing their products in February.
The applications for the fourth cohort were received from 15 June to 1 August 2022.
The regulatory sandbox allows the regulator, innovators, financial service providers and customers to conduct field tests to gather evidence on the benefits and risks of new financial products.
The aim of the regulatory sandbox is to promote responsible innovation in financial services, promote efficiency and provide benefits to consumers.
According to the RBI, the first and foremost benefit of the regulatory sandbox is that it promotes ‘learning by doing’ on all sides. Among other benefits, the regulatory sandbox can lead to better results for consumers through an increased choice of products and services, reduced costs and improved access to financial services.
RBI invited applications for the first cohort on the theme “Retail Payments” in November 2019 and for the second cohort on the theme “Cross Border Payments” in December 2020.
The applicants for entry into the regulatory sandbox are fintech companies, including startups, banks, financial institutions, any other company and Limited Liability Partnerships (LLPs) and partnership firms, which work with or support financial services.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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