Testing of products under the RBI's regulatory sandbox, which was delayed on account of COVID-19 pandemic, has commenced, with two entities starting the "test phase" with their products.
"Two entities...have started testing of their products from November 16, 2020. The remaining four are expected to start the test phase shortly which will be communicated as and when they do so," the Reserve Bank said in a statement on Tuesday.
Live testing of innovative products is done under the regulatory sandbox approach.
The central bank had announced opening of the first cohort under regulatory sandbox, with "Retail Payments" as its theme, in November last year.
It had received applications from 32 entities, of which six were selected for the "test phase".
The commencement of testing was delayed on account of the COVID-19 situation, it said.
Natural Support Consultancy Services, Jaipur is testing the product "eRupaya". It is a set of Near-Field Communication (NFC) based prepaid card and NFC-enabled Point of Sale (PoS) device to facilitate offline Person-to-Merchant (P2M) transactions and offline digital payments in remote locations.
New Delhi-based Nucleus Software Exports is testing the offline digital cash product "PaySe". The product proposes to help in digitisation of payments in rural areas, starting with self help groups (SHG), through an offline payment solution and a digitised SHG-centered ecosystem.
Regulatory sandbox usually refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may (or may not) permit certain relaxations for the limited purpose of the testing.
The regulatory sandbox allows the regulator, innovators, financial service providers and customers to conduct field tests to collect evidence on the benefits and risks of new financial innovations.
The objective of the regulatory sandbox is to foster responsible innovation in financial services, promote efficiency and bring benefit to consumers.