(The Gist of PIB) IFSCA introduces Framework for Regulatory Sandbox to tap into innovative FinTech solutions

(THE GIST OF PIB) IFSCA introduces Framework for Regulatory Sandbox to tap into innovative FinTech solutions

International Financial Services Centres Authority (IFSCA) was set up with an objective to develop a world class FinTech hub at IFSC located at GIFT
City in Gandhinagar.
It endeavours to encourage promotion of FinTech initiatives in financial products and financial services across spectrum of banking, insurance, securities and fund management.

In this direction, IFSCA has introduced a framework for “Regulatory Sandbox”.
Under sandbox framework, entities operating in the capital market, banking, insurance and financial services space shall be granted certain facilities and flexibilities to experiment with innovative fintech solutions.
Regulatory Sandbox refers to live testing of new products or services in a controlled regulatory environment for which regulators may permit certain regulatory relaxations for limited purpose of the testing.
FinTech is an umbrella term to denote technological innovation having a bearing on financial services.
In India, FinTech can provide workable solutions to the problems faced by traditional financial institutions such as low penetration, scarce credit history and cash driven transaction economy.