Regulatory sandbox: RBI names four more startups selected in first cohort

The Reserve Bank of India (RBI) on December 24 announced the names of four more startups selected in the first cohort on retail digital payments under its regulatory sandbox initiative.

The four startups are: CityCash, ToneTag, Ubona Technologies, and Eroute Technologies.

This takes the list of companies in the first cohort to six. The first two names which were released on November 17 are: National Support Consultancy Services from Jaipur and Nucleus Software Exports, based in Noida.

The regulatory sandbox is a protected environment within which the selected companies will operate and test their products. Here they will have to show their system's preparedness while dealing with dummy data. Once they achieve success within the protected environment, the systems will be allowed to be tested in the live environment with actual banks and consumer data.

While the application to the first cohort had opened back in November 2019, the RBI said that programme implementation and selection of the finalists had been delayed because of the COVID-19 pandemic.

The central bank is using the programme to identify innovations across three sectors - offline payments, feature phone-based payments and contactless transactions.

The RBI has been pushing for innovation in the offline payments space since the regulator believes that rural payments can be digitised through contactless and NFC mechanisms.