RBI to form regulatory sandbox for fintech, set up data science lab

MUMBAI: The Reserve Bank of India (RBI) is working on a regulatory sandbox for financial technology and setting up data science labs to keep pace with innovation in the digital lending space.
It has set up an inter-regulatory working group to study regulatory issues relating to fintech and digital banking in India.

“A data science lab will be opened in the RBI with a mixed team of engineers, economists and statisticians and they will be going through internal data of each vertical,” Gautam Chatterjee, principal adviser to the Department of Statistics and Information Management at the RBI, said at an ET Edge event.

Today, all departments in the RBI are relying on data analytics, he said. A regulatory sandbox, to separate running computer programs to mitigate system failures and software vulnerabilities from spreading, will help in product innovation as more products are coming in frequently.

“More products are coming in the market. To guard against the creative vulnerabilities, the idea is to bring in a regulatory sandbox where anybody can bring in a new product and it can be first tested before going to public,” said Chatterjee.

The central bank has recognised peer-to-peer lending as a non-banking finance company category. It is working on streamlining rules for the NBFC space in line with those of banks.