The Reserve Bank of India will now issue the guidelines just within the coming two months for the fintech companies to test their new products and services on the small group of people before expanding and scaling it.
Shaktikanta, the RBI governor revealed that the “regulatory Sandbox” will now going to help the financial technology company’s to launch the innovative products at lower costs in less time. The sandbox will also enable the financial tech companies to do virtual testing of their new products and services.
The companies will now be able to test the viability of the product without any expensive methods.
“The Reserve Bank’s working group on fintech and digital banking…suggested the introduction of a ‘regulatory sandbox/innovation hub’ within a well-defined space and duration to experiment with fintech solutions, where the consequences of failure can be contained and reasons for failure analyzed,” Das said.
To protect and safeguard customers and the interest of all the stakeholders, and streamlines their influence on the financial system, the governor has now stressed on the need for the regulatory framework for the fintech firms.
Financial technology companies use the latest technology to provide the financial services which includes the crowdfunding, lending, payments and much more.
According to the report which has been revealed by the NITI Aayog, India is one of the fastest growing financial technology markets across the globe, and the industry research has now projected around $1 trillion and small and medium-sized enterprises credit will be digitally disbursed by the end of 2025.
Das also said that the RBI has encouraged the banks to explore the possibility of new alliances with the financial technology firms, which would also give further financial inclusion with the latest IT innovation.