On July 26, 2024, the Reserve Bank of India (RBI) has selected 5 entities out of 22 applications for the Test Phase under the 5th cohort of Regulatory Sandbox (RS) on the theme ‘ Neutral’.
- The selected entities will commence testing of their products on solutions from August 2024. The 5th cohort under RS was announced in September 2022.
The Selected Sandbox entites are,
- Connectingdot Consultancy Private Limited(CCPL), Kolkata, West Bengal (WB)
- Epifi Technologies Private Limited(ETPL), Bengaluru, Karnataka
- Finagg Technologies Private Limited(FTPL), Noida, Uttar Pradesh (UP)
- Indian Banks’ Digital Infrastructure Company (IBDIC) Private Limited, Mumbai, Maharashtra
- Signzy Technologies Private Limited(STPL), Bengaluru, Karnataka
Sandbox entites Products:
i.CCPL: Its’ solution enhances loan default prediction accuracy by categorizing portfolios into high, medium, and low risk.
- It identifies reasons for defaults and offers tailored recommendations to banks and lenders for better risk mitigation.
ii.ETPL: Its’ solution facilitates digital Non-Resident External (NRE)/Non-Resident Ordinary (NRO) account opening via video Know Your Customer (KYC) and identity validation, streamlining the process for NRIs.
- It aims to enhance efficiency by lowering costs, reducing turnaround time, and eliminating the need for physical documentation and verification.
iii.FTPL: Its’ blockchain-based solution offers deep tier vendor financing for Micro, Small, and Medium Enterprises (MSMEs) in large enterprises’ supply chains, converting receivables into blockchain tokens.
- MSMEs can redeem these tokens for credit from banks or Non-Banking Financial Company (NBFCs), making credit more accessible and affordable for smaller MSMEs.
iv.IBDIC Private Limited: Its’ blockchain-based deep tier financing solution allows MSMEs in a supply chain to access affordable finance linked to their value addition.
- Accepted Original Equipment Manufacturer (OEM) invoices are tokenized and transferred digitally, enabling lenders to fund suppliers against these tokens, thus, making credit more accessible and affordable for smaller MSMEs.
v.STPL: Its’ unassisted video KYC solution enables users to complete KYC independently, reducing time, improving success rates, lowering drop-offs, and ensuring a seamless experience for both customers and regulated entities.
About Regulatory Sandbox (RS):
i.The RS was established on August 13, 2019, based on the recommendation of the Working Group (WC) on Fintech and Digital Banking, set up by Financial Stability and Development Council – Sub Committee (FSDC-SC).
ii.It refers to the live testing of new products or services in a controlled/test regulatory environment. Through this field tests are conducted on the advantages and drawbacks of the new financial innovations.
ii.The target applicants for entry to the RS are fintech companies, including startups, banks, financial institutions, any other company and Limited Liability Partnerships (LLPs) and partnership firms, partnering with or providing support to financial services businesses.
iv.The Previous 4 Cohorts under RS are:
- First- Retail Payments
- Second- Cross Border Payments
- Third- MSME lending
- Fourth- Prevention and Mitigation of Financial Frauds
About Reserve Bank of India (RBI):
Governor – Shaktikanta Das
Deputy Governors – Swaminathan Janakiraman, Michael Debabrata Patra, M. Rajeshwar Rao, T. Rabi Sankar
Establishment– 1st April 1935
Headquarters– Mumbai, Maharashtra
