In an article on the regulatory sandbox proposed by the Reserve Bank of India (RBI), Shilpa Mankar Ahluwalia gave a comprehensive overview on the guidelines. While she raised concerns such as restrictive eligibility criteria, protection of data, exclusion of cryptocurrency from the purview of the RBI’s sandbox, necessity to work with other market regulators and transparency in selection process, there are other legal and regulatory gaps under: 1) RBI’s draft enabling framework for regulatory sandbox (RBI framework); 2) innovation sandbox introduced by the Securities and Exchange Board of India (SEBI Framework) and 3) draft Insurance Regulatory and Development Authority (IRDAI regulatory sandbox) Regulations, 2019.
Lessons from global regulators who have experimented with sandboxes in emerging and developed economies may be applied in further refining the frameworks.
First, clauses 6.2 and 6.6 of the RBI framework are uncertain on whether the RBI can provide legal waivers or regulatory relaxations during the sandbox period. The guidelines require unambiguous drafting for regulatory clarity.