Individual regulators like RBI, SEBI, IRDAI and IFSCA already operate their own regulatory sandboxes for testing innovative fintech solutions. However, hybrid products often cut across multiple regulatory domains, creating challenges for innovators who need to approach each regulator separately. To resolve this, the Financial Stability and Development Council’s Sub-Committee (FSDC-SC) created the Inter-Regulatory Technical Group on FinTech (IRTG) to prepare a unified Standard Operating Procedure (SOP) for an Inter-operable Regulatory Sandbox (IoRS).

The Reserve Bank of India, along with SEBI, IRDAI, PFRDA and IFSCA, has released FAQs on IoRS, providing a structured mechanism for testing cross-sectoral financial products through a single window.

IoRS allows innovators to test hybrid financial products or services that fall under the ambit of more than one financial regulator. Under this system, the regulator with jurisdiction over the dominant feature of the product acts as the Principal Regulator (PR), while others act as Associate Regulators (ARs). The PR’s sandbox framework governs the testing process with coordinated inputs from ARs.

Eligible participants include fintech firms, financial institutions, start-ups, RegTech providers and even foreign fintech entities (with IFSCA acting as PR in such cases). Testing is conducted in controlled conditions, providing regulatory feedback and reducing time to market. Applications can be made on a rolling basis via the FinTech Department of RBI (email: iors@rbi.org.in), using a single application form.