The Reserve Bank of India (RBI) has unveiled a significant shift in its approach to fostering innovation within the fintech sector. In a statement released on April 9, 2025, the RBI announced the launch of a ‘Theme Neutral’ ‘On Tap’ application facility under its Regulatory Sandbox (RS) framework, marking a move towards continuous and proactive engagement with innovators.
Since 2019, the RBI has been operating the Regulatory Sandbox, during which four thematic cohorts were completed, and feedback from stakeholders was gathered. The goal has been to support innovation while ensuring regulatory compliance. Based on this experience, and announced earlier in October 2021, an ‘On Tap’ application facility for themes of closed cohorts was introduced. Now, the RBI is further expanding this approach with the ‘Theme Neutral’ option.
Under the new ‘On Tap’ facility, applications containing any technology or theme can be submitted, allowing for a broader range of innovative solutions to be tested within the regulatory ambit of the RBI. To provide guidance, the RBI has offered an illustrative list of topics, including digital financial literacy, digital lending and alternate credit scoring, e-KYC and identity verification, and emerging technologies such as Artificial Intelligence (AI), Blockchain, Machine Learning (ML), Smart Contracts, and Tokenisation. Financial inclusion, mule account identification, and tracking, open finance, RegTech, SupTech, solutions for Divyang (including voice/language-based financial services), grievance redressal, and sustainable finance and climate risk mitigation are also included.
The move towards a “Theme Neutral’’ ‘On Tap’ facility reflects the RBI’s commitment to adapting to the rapidly evolving fintech landscape. By removing the restrictions of pre-defined themes and allowing applications to be submitted at any time, the central bank aims to encourage continuous innovation and provide a more dynamic environment for fintech companies to develop and test new solutions. The RBI believes this will help to proactively respond to the evolving fintech scenario.
Interested entities can submit their applications along with supporting documents via email, with applications assessed under the provisions of the Enabling Framework for Regulatory Sandbox. The RBI’s initiative signals a progressive step forward in enabling India’s financial sector to adapt to rapid technological changes while safeguarding consumer interests and systemic integrity. This is expected to boost India’s fintech ecosystem by providing startups with greater flexibility and opportunities for experimentation.
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This change will redefine the way fintech startups engage with regulatory processes in India, and the RBI’s dedication to fostering innovation in financial services remains strong. With its new ‘On Tap’ sandbox model, the RBI is creating a more dynamic environment for fintech innovation and will help stay agile and responsive to technological advancements.
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