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RBI announces opening of 3rd cohort under RS; 6 entities completed test phase in 1st Cohort & 8 selected for 2nd

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RBI announces opening of third cohort under Regulatory SandboxOn September 13, 2021, the Reserve Bank of India (RBI) announced the opening of the 3rd cohort under the Regulatory Sandbox (RS) on the theme ‘MSME Lending‘. The eligible entities can submit their application from October 01, 2021 to November 14, 2021.

  • The theme for 1st cohort (November 2020) was ‘Retail Payments‘ while for 2nd cohort (December 2020) it was ‘Cross Border Payments‘.

What is a Regulatory sandbox?

Initiated in August 13, 2019, it refers to live testing of new products or services in a controlled regulatory environment for which regulators may (or may not) permit certain relaxations for the limited purpose of the testing.

  • The objective of the regulatory sandbox is to foster responsible innovation in financial services, promote efficiency and bring benefit to consumers.
  • It also allows the regulator, innovators, financial service providers and customers to conduct field tests regarding benefits and risks of new financial innovations.

Also, in December 2020, RBI eased the eligibility norms for applications under sandbox under which net worth requirement decreased from the existing Rs 25 lakh to Rs 10 lakh, as also included Partnership firms and Limited Liability Partnership (LLPs) to participate in the RS.

6 entities completed test phase in 1st Cohort

The apex also announced that six entities have completed the test phase of the 1st cohort on retail payments. These are as follows:

Sandbox Entity Product
Nucleus Software Exports PaySe
Tap Smart Data Information Services Citycash
Natural Support Consultancy Services IND-e-Cash
Naffa Innovations ToneTag
Ubona Technologies BHIM Voice
Eroute Technologies UPI based offline payment solution using SIM overlay smartcard

The above mentioned entities now have exited the cohort. The products found acceptable under this Cohort may be considered for adoption by Regulated Entities.

8 entities selected for 2nd cohort:

The eight entities (out of 26) that have been selected for the test phase under 2nd cohort are Book My Forex; Cashfree Payments; Fairex Solutions; Flyremit; Nearby Technologies (Product-Paynearby) ; Open Financial Technologies; SoCash India; and Wall Street Finance (Product-WSFx SecuSmart REMIT).

  • The entities will commence testing of their products from the third week of September 2021.

Recent Related News:

On July 06, 2021, the Reserve Bank of India (RBI) launched the 54th round of quarterly ‘Order Books, Inventories and Capacity Utilization Survey’ (OBICUS) of the manufacturing sector. The reference period for the survey is Q1 FY22 (April – June 2021).

About Reserve Bank of India (RBI):

Establishment– April 1, 1935
Headquarters– Mumbai, Maharashtra
Governor– Shaktikanta Das
Deputy Governors– Mahesh Kumar Jain, Michael Debabrata Patra, M. Rajeshwar Rao, T. Rabi Sankar