GS Mains Model Question & Answer : What is Regulatory Sandbox in terms of economy? What are its Benefits? Comment

 GS Mains Model Question & Answer : What is Regulatory Sandbox in terms of economy? What are its Benefits? Comment

Q. What is Regulatory Sandbox in terms of economy? What are its Benefits? Comment

Model Answer:

What is Regulatory Sandbox in terms of economy? What are its Benefits?


A regulatory sandbox is an experimental oversight mechanism for innovative products and services that do not fall into an existing regulatory regime or cut across traditional regulators’ domains. Such innovations are permitted to operate for a limited period of time at a limited scale to understand its efficacy and implications, so that the best alternatives for regulation can be evolved based on concerns that emerge.

The sandbox needs to be designed to adopt this unified consumer-centric lens through a single integrated sandbox, serving all four financial sector regulators… technology will always be ahead of regulation like RBI, SEBI, IRDAI, PFRDA.

NITI AAYOG approach this mechanism because India’s financial sectors regulators hinders ideas in the financial technology sector.

Benefits of Sandbox:

Twin objectives of nurturing financial innovation and safeguarding consumer interests.

Graet way to unlock innovation for mass public adoption .

Will be a boost for Start Up .

Globally regulatory sandboxes have been introduces in the UK , Singapore, Australia UAE etc.

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