Discuss the importance of Inter-operable Regulatory Sandbox developed by the Financial Stability and Development Council. (150 words)
Refer - Financial Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 2 years
KEY POINTS
· The standard operating protocol for the inter-operable regulatory sandbox continues to rely on disparate sandbox frameworks of financial regulators.
· This is an important development for fintech innovation that often blurs sectoral demarcations of the Indian financial system.
· However, the SOP does not address important issues likely to arise in testing cross-sectoral fintech innovations.
· A regulatory sandbox (sandbox) allows live testing of innovative products/ services under regulatory supervision and with regulatory relaxations.
· For instance, a fintech application may be designed to help a farmer to buy crop insurance, provide advice on loan products, and manage cashflows from sales. This application may fall within the ambit of RBI and IRDAI.
· As per the SOP, the regulator under whose remit the product’s ‘dominant feature’ falls will be the Principal Regulator (PR), and the regulator under whose remit other features fall will be the Associate Regulator (AR).
· Applicants in India will have to comply with the regulations of the PR as well as terms and conditions imposed by the AR, which may be substantially different, as discussed above. The lack of regulatory uniformity acts as a barrier to innovations.
· A unified framework is important for harmonised regulatory and policy responses to fintech innovations and leveraging IoRS’s true potential.
K. V. A 2 years
Pls review
IAS Parliament 2 years
Good answer. Keep writing.
PANDI SANTHOSH RAJA S 2 years
Kindly review
IAS Parliament 2 years
Give answers to the question asked. Remove irrelevant points. Keep writing.
