The Reserve Bank of India (RBI) will issue guidelines within two months for fintech companies to test their new products on a small group of users before scaling up.
- In order to protect customers and safeguard the interests of all stakeholders, and streamline their influence on the financial system, the governor stressed on the need for a regulatory and supervisory framework for fintech firms.
- A regulatory sandbox is a safe harbour, where businesses can test innovative products under relaxed regulatory conditions.
- Typically, participating companies release new products in a controlled environment to a limited number of customers for a limited period of time.
- According to NITI Aayog, India is one of the fastest growing fintech markets globally, and industry research has projected that $1 trillion, or 60% of retail and SME (small and medium sized enterprises) credit, will be digitally disbursed by 2029.
- The Indian fintech ecosystem is the third largest in the world, attracting nearly $6 billion in investments since 2014.