Selected institutions 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 mitigate financial frauds 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/tested regulatory environment for which regulators may allow certain exemptions.
The Reserve Bank announced the opening of the fourth cohort under the regulatory sandbox in June 2022 for prevention and mitigation of financial frauds.
The RBI said it had received nine applications under the fourth group, out of which six entities have been selected for the ‘testing phase’.
The six organizations are – Bhavan Cybertech, Crediwatch Information Analytics, EnStage Software (Wibmo), HSBC, in association with Wibmo, Napid CyberSec and Trusting Social.
Selected institutions will begin testing their products in February.
Applications for the fourth cohort were received from June 15 to August 1, 2022.
The Regulatory Sandbox allows regulators, innovators, financial service providers and customers to conduct field tests to collect evidence on the benefits and risks of new financial products.
The regulatory sandbox aims to foster responsible innovation in financial services, promote efficiency and benefit consumers.
According to RBI, the first and foremost advantage of the regulatory sandbox is that it promotes ‘learning by doing’ on all sides. The regulatory sandbox can lead to better outcomes for consumers through an increased range of products and services, lower costs, and better access to financial services, among other benefits.
RBI invited applications for the first cohort with the theme ‘Retail Payments’ in November 2019 and for the second cohort in December 2020 with the theme ‘Cross Border Payments’.
Target applicants for entry into the regulatory sandbox are startups, fintech companies including banks, financial institutions, any other company and limited liability partnerships (LLPs) and partnership firms partnering with or providing support to financial services businesses Huh.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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