Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
6) What do you understand by sandbox which is often mentioned in the context of financial technologies companies? Discuss its importance to Indian economy.(250 words)
Why this question:
Recently the Securities and Exchange Board of India (SEBI) has released a discussion paper on a framework for a ‘regulatory sandbox’ for fintech testing.
Key demand of the question:
One must explain in detail what is the concept of sandbox, what are its utilities, how is it useful in effective regulations of Fintech companies.
Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.
Structure of the answer:
One can start by bringing out the highlights of the discussion paper brought out by SEBI.
In brief discuss –
- Highlights of the paper.
- Definition: A live, testing environment where new products, processes, services and business models could be deployed on a limited set of eligible customers for a specified period of time, with certain relaxations in the regulations and guidelines.
- Objective: The sandbox is intended to serve as a testing ground for new business models and technologies that benefit the investors, Indian markets and the Indian economy at large.
- To begin with, all market participants that are registered with the SEBI will be eligible to test within the sandbox. At a later stage, SEBI may allow sandbox access to fintech start-ups and other fintech firms as well.
- To be eligible to be tested in the sandbox, a solution need to show that it directly benefits the investors and poses no risks to the financial markets among other parameters.
based on your discussion, conclude with significance of such a concept.