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KARACHI, May 20 (APP):In a bid to foster innovation and promote new technologies, products, and business models in line with its Vision 2028, the SBP has issued the Guidelines for the Regulatory Sandbox (RSB).
The RSB guidelines, issued under Section 3 of the Payment Systems and Electronic Fund Transfers (PS&EFT) Act, 2007, are aimed at facilitating new and existing entities, including startups, to test their financial solutions under a controlled regulatory environment, said a statement issued here.
The other objectives of the guidelines include, identifying the risks associated with innovative solutions and developing appropriate risk mitigation mechanisms; support evidence-based regulatory formulation, enhance regulatory clarity, coordination and collaboration with other regulatory sandboxes from domestic and other jurisdictions to work on areas of mutual interest.
The potential impact of Fintech innovations on consumers and market are being studied by many regulators globally and those are adapting current regulatory frameworks to foster new opportunities without compromising consumer protection and financial stability through development of a Regulatory Sandbox.
The SBP is hopeful that the Regulatory Sandbox will enable the participants to test their products and the associated operational models around innovative ideas and technologies and it will also help SBP in refining and upgrading the regulatory environment in line with the evolving innovative technologies.
The Regulatory Sandbox will follow a cohort-based approach centered around innovative themes. SBP will soon invite applications for participation in its first cohort. The theme(s) of the first cohort will be announced by end June after completing the market engagement, which is already underway.
Eligibility Criteria allows SBP Regulated Entities as well as entities licensed by other national regulators, non-licensed local Start-Ups or individual applicants and entities incorporated outside Pakistan for participation in the Sandbox.
The applicants and their propositions would be evaluated based on the certain parameters which included, Innovation, Consumer Utility, Understanding of the Regulatory Barriers, Readiness for Testing, Scalability and Risk Management.
The central bank encouraged all the interested parties to use the RSB platform for testing their innovative ideas and products and contribute to Pakistan’s evolving Fintech landscape and digital financial ecosystem.