The RBI has started the third cohort of the Regulatory Sandbox

NEW DELHI: The Reserve Bank of India announced the launch of the third cohort of the Regulatory Sandbox (RS) on Friday, with the theme of MSME Lending. The application window for the affiliate will be open from October 1 through November 14, 2021.

Courtesy: Reserve Bank of India

In a statement, the RBI stated, “The MSME category has emerged as the growth engine of the Indian economy, contributing considerably to the country’s economic and social development by stimulating entrepreneurship and generating large job possibilities through entrepreneurial innovations.”

It further stated that a cohort on MSME Funding is likely to spur solutions to fill the lending gap for MSMEs by utilising innovative technology and data analytics.

The RBI created the Regulatory Sandbox intending to encourage responsible innovation in financial services, increasing efficiency, and benefiting customers.

Thematic cohorts are used in the RBI Sandbox. Six entities have successfully exited the sandbox with a range of products. This includes feature phone-based offline payments using voice, innovative use of Near Field Communication (NFC) in revenues, voice-based UPI payment solution, and offline payment solution using SIM overlay smartcard in the first cohort with Retail Payments its theme.

Eight entities have been selected for testing in the Second Cohort on Cross Border Payments, with products ranging from a Blockchain-based cross-border payment system to digitization of documentation and cross-border payment processing, a cross-border platform to facilitate the purchase of assets listed on foreign exchanges, and an aggregation platform of cross-border payment providers.

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