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FISME pledges support to Cos experimenting on Regulatory Sandbox for MSME lending

Updated: Oct 09, 2021 10:46:12am
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FISME pledges support to Cos experimenting on Regulatory Sandbox for MSME lending

New Delhi, Oct 9 (KNN) Federation of Indian Micro and Small & Medium Enterprises (FISME) has offered support to companies who are experimenting innovative practices for MSME lending as part of third cohort of Regulatory Sandbox mooted by Reserve Bank of India.

The applications for the third cohort are invited to be submitted from October 01, 2021, to November 14, 2021.

To encourage innovations RBI had rolled out regulatory sandbox framework on August 13, 2019. Regulatory sandbox refers to live testing of new products or services in a controlled/regulatory environment for which regulators may or may not pertain certain regulatory relaxations.

The sandbox allows regulator, innovator, financial services providers and customers to conduct field tests to collect evidence on benefits and risks of new financial innovations while carefully monitoring and containing risks.

“The regulatory sandbox approach adopted by RBI for 'MSME lending' is greatly welcomed and we hope that it would help the framework evolve in a matured fashion. We are very keen to see positive outcome from the sandbox frameworks and offer our full cooperation for companies participating”, said President FISME. Dr. Animesh Saxena.

“Interested companies may get in touch with us for discussions for experimenting with member companies," he added.

As per the RBI, first and foremost benefit of regulatory sandbox is that it fosters 'learning by doing' on all sides. Among other benefits, the Regulatory Sandbox could lead to better outcomes for consumers through an increased range of products and services, reduced costs and improved access to financial services.

The Reserve Bank’s Regulatory Sandbox (RS) had introduced three cohorts on ‘Retail Payments’; ‘Cross Border Payments’; and ‘MSME Lending’ and a fourth cohort on ‘Prevention and Mitigation of financial frauds’ is added to the list during announcement of Monetary Policy.

The RBI had eased the eligibility norms for applications under sandbox in December last year by reducing net worth requirement from the existing INR 25 lakh to INR 10 lakh, as also including Partnership firms and Limited Liability Partnership (LLPs) to participate in the RS.

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