RBI Allows 6 Entities To Test Fintech Products To Deal With Financial Frauds Under Sandbox Scheme
Regulatory sandbox refers to the live testing of new products or services in a controlled/test regulatory environment for which the regulators may permit certain relaxations
Six entities, including HSBC and Creditwatch, have been allowed to test their fintech products to prevent and mitigate financial fraud as part of the fourth cohort under the RBI's regulatory sandbox scheme.
Regulatory sandbox refers to the live testing of new products or services in a controlled/test regulatory environment for which the regulators may permit certain relaxations.
The Reserve Bank announced the opening of the fourth cohort under the regulatory sandbox in June 2022 for the prevention and mitigation of financial fraud.
The RBI said it had received nine applications under the fourth cohort, of which six entities have been selected for the 'test phase'.
The six entities are -- Bahwan Cybertek, Crediwatch Information Analytics, enStage Software (Wibmo), HSBC in collaboration with Wibmo, napID Cybersec and Trusting Social.
The selected entities would commence testing their products in February.
The applications for the fourth cohort were received from June 15 to August 1, 2022.
The regulatory sandbox allows the regulator, innovators, financial service providers and customers to conduct field tests to collect evidence on the benefits and risks of new financial products.
The objective of the regulatory sandbox is to foster responsible innovation in financial services, promote efficiency and bring benefits to consumers.
As per the RBI, the first and foremost benefit of the regulatory sandbox is that it fosters 'learning by doing' on all sides. Among other benefits, the regulatory sandbox could lead to better outcomes for consumers through an increased range of products and services, reduced costs and improved access to financial services.
The RBI invited applications for the first cohort with the theme 'Retail Payments' in November 2019 and for the second cohort with the theme of 'Cross Border Payments' in December 2020.
The target applicants for entry to the regulatory sandbox are fintech companies, including start-ups, banks, financial institutions, any other company and Limited Liability Partnerships (LLPs) and partnership firms, partnering with or providing support to financial services businesses.
(This story is published as part of the auto-generated syndicate wire feed. No editing has been done in the headline or the body by ABP Live.)
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