BUSINESS STANDARD Fintech startups to test regulatory sandbox


  • RBI proposed that fintech start-ups could set up a regulatory sandbox or live-testing of innovative products and services.
  • This would be done in segments such as retail payments, money transfer, artificial intelligence and data analytics in the financial sector.
  • A regulatory sandbox (RS) refers to live-testing of new products or services in a controlled and test regulatory environment.


  • According to bank regulator RBI, a Regulatory Sandbox (RS) refers to live-testing of new products or services in a secure and test regulatory environment for which regulators may or may not allow certain regulatory relaxations for the limited purpose of the testing.
  • The Regulatory Sandbox (RS) permits the innovators, regulators, financial providers and the customers to carry out field tests so that they can verify the benefits and risks of new financial innovations.
  • The objective of RS is to provide a formal regulatory programme for testing new products and services with a customers in a live environment.
  • After 10-12 entities were selected through a comprehensive selection process, the RS will begin the testing process. The entities were selected under ‘Fit and Proper criteria’ for participants in RS.
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