RBI said that the applications from Indian fintechs having global ambition and foreign fintechs seeking entry to India, will be referred to International Financial Services Centres Authority (IFSCA), for taking forward the proposals, as IFSCA will be the primary regulator for all such applications.
The regulatory sandbox framework of the regulator under whose remit the ‘dominant feature’ of the product falls, shall govern it as ‘principal regulator’. The regulator/s under whose remit the other features apart from the dominant feature of the product fall shall be the ‘associate regulator’, RBI said.
Two sets of factors would be considered or deciding the dominant feature. Firstly, the type of enhancement to the existing products like loans, deposits, capital market instruments, insurance, G-sec instruments, pension products, etc., and secondly, the number of relaxations sought by the entity for undertaking the test under the IoRS.
“The dominant feature shall be decided with greater weightage to the number of relaxations sought,” the banking regulator said.
A regulatory sandbox is a highly controlled environment provided by the central financial body to fintechs/financial institutions to test out newer concepts and innovations before launching to the majority of the public.
The regulator said that its fintech department will act as the nodal point for receiving applications under it. The standard operating procedure was framed by the inter-regulatory technical group on fintech.