The Reserve Bank of India (RBI) has invited companies in the cross-border payments space to apply as part of the second cohort of its regulatory sandbox, it said in a release on Wednesday. The first cohort under the RBI’s sandbox involved companies in the retail payments space be it for feature phones, offline payments or contactless payments. As of date two entities have begun testing their solutions and another four are expected to begin testing their solutions in due course.
The RBI released the framework for its regulatory sandbox in August 2019, which would help companies and startups test new payments and lending solutions, among others, under limited regulatory controls and supervision. The aim of creating the sandbox is to test a “product’s viability without the need for a larger and more expensive roll-out,” while at the same time giving regulators “first-hand empirical evidence on the benefits and risks of emerging technologies and their implication,” it said.
In its release, the RBI said that in 2019, India received $83 billion and during the first half of 2020, it received $27.4 billion, making it the largest recipient of inbound remittances in the world. “The Cohort is expected to spur innovations capable of recasting the cross-border payments landscape by leveraging new technologies to meet the needs of a low cost, secure, convenient and transparent system in a faster manner,” the RBI said.
The central bank also updated its framework for the sandbox in order to broad base the eligibility criteria. It has reduced the minimum net-worth requirement from ₹25 lakh to ₹10 lakh and has also allowed Partnership firms and a Limited Liability Partnership to participate in the sandbox. Interested entities can apply to participate in the second cohort of the RBI’s sandbox between December 21, 2020 to February 15, 2021, it said.
Further, the RBI has decided that the third cohort of the sandbox will focus on micro-small-medium-enterprise (MSME) lending solutions, details of which will be announced soon.