The International Financial Services Centres Authority (IFSCA) has introduced a framework for “Regulatory Sandbox”.
It is a safe harbour, where businesses can test innovative products under relaxed regulatory conditions. Typically, participating companies release new products in a controlled environment to a limited number of customers for a limited period of time.
The Regulatory Sandbox shall operate within the IFSC located at GIFT City. 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 in a live environment with a limited set of real customers for a limited time frame. These features shall be fortified with necessary safeguards for investor protection and risk mitigation.
It is a statutory body established in 2020. It works under the Department of Economic Affairs, Ministry of Finance. Headquartered in Gandhinagar, Gujarat.
Its main function is to develop and regulate the financial products, financial services and financial institutions located/performed in the International Financial Services Centres in India. The Authority is empowered to exercise the powers of RBI, SEBI, IRDAI and PFRDA in respect of financial services, financial products and financial institutions performed/located in the international financial services centres in the country.
