"Definitely, it is a welcome move. However, the RBI innovation initiatives are currently split between the Institute for Development and Research in Banking
Technology (who runs the sandbox) and this new initiative. We are hopeful that the RBI creates a single dedicated org to run all innovation and sandbox initiatives. Similar to the way the Singapore's monetary authority runs both the innovation grants as well as the sandbox," said Sandeep Srinivasa, founder of micro-lending startup Redcarpet.
The move comes close on the heels of the RBI setting up a regulatory sandbox framework where solutions related to digital payments was the first cohort announced in November last year. Six proposals were received under the sandbox, the pilot studies or trials of which have been delayed due to the Covid-19 pandemic.
The purpose of a regulatory sandbox stemmed from then RBI executive director Sudarshan Sen’s committee in 2017, referring to live testing of new products or services in a controlled environment for which regulators may permit certain regulatory relaxations for the limited purpose of testing.
The RBI has also announced a scheme on a pilot basis for offline retail payments using cards and mobile devices. The aim is to encourage customers to go for digital transactions, even in places where internet connectivity is absent.
Based on experience gained, detailed guidelines for the roll-out of the scheme will be announced in due course, said the RBI. Besides, it also wants payment system operators to work on an online grievance resolution mechanism in order to resolve consumer grievances around digital payments.
INCUBATE TO INNOVATE
The innovation hub will support, promote, and handhold cross-thinking, spanning regulatory remits and national boundaries
Areas such as cybersecurity, data analytics, delivery platforms, payment services to remain in the forefront
The RBI last year had announced a regulatory sandbox programme for new experiments in the field of financial technology under its supervision
While six programmes were shortlisted by the RBI for the first set of pilots, they have now been delayed due to the pandemic
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