As India accelerates its journey towards becoming a global FinTech powerhouse, regulatory innovation is keeping pace. One such major initiative is the Inter-operable Regulatory Sandbox (IoRS) — a collaborative effort by Indian financial sector regulators to support testing of innovative hybrid financial products/services.
Below is a concise summary of frequently asked questions to help innovators and stakeholders understand the IoRS initiative.
What is a Regulatory Sandbox?
A Regulatory Sandbox (RS) is a framework that allows live testing of new financial products or services in a controlled environment. Regulators may offer temporary regulatory relaxations to support innovation while safeguarding consumers and the financial system.
Which Indian Regulators Offer Regulatory Sandboxes?
Multiple financial sector regulators in India have their own RS frameworks:
- RBI – Banking & Payments
- SEBI – Securities Markets
- IRDAI – Insurance
- IFSCA – International Financial Services
- PFRDA – Participates in IoRS but doesn’t have its own RS
Each sandbox is tailored to its respective sector, but until recently, no unified platform existed for cross-sectoral products—enter IoRS.
What is IoRS and Why is it Needed?
The Inter-operable Regulatory Sandbox (IoRS) is a collaborative framework developed by the Inter-Regulatory Technical Group on FinTech under the FSDC-Sub Committee. It allows testing of hybrid financial products/services that fall under the jurisdiction of more than one regulator.
Instead of separately approaching multiple regulators, innovators can now apply through a single-window system.
How is IoRS Different from Individual Sandboxes?
While individual sandboxes focus on single-sector innovations, IoRS is designed for products that cut across regulatory domains, such as:
- InsurTech (Insurance + Tech)
- WealthTech (Investment + AI)
- Digital Payments with Insurance Bundles
- Cross-border Financial Solutions
This unified approach eliminates duplication and accelerates innovation.
Who Can Apply to IoRS?
Eligible participants include:
- FinTechs, RegTechs, SupTechs
- Start-ups and financial institutions
- Foreign FinTechs entering India
The eligibility criteria are governed by the Principal Regulator (PR), under whose remit the product’s dominant feature falls.
How Does the Application Process Work?
- Submit the application via email to: iors@rbi.org.in
Access form here - RBI’s FinTech Department conducts preliminary review.
- The Principal Regulator and relevant Associate Regulators conduct detailed assessment and testing.
There’s no application fee, and applications are accepted on an on-tap basis year-round.
What Happens After Testing?
Once testing concludes:
- The product must seek formal regulatory approvals.
- If approved, it can be launched commercially.
- Details of successful products may be published for wider adoption.
The IoRS is a bold step towards enabling holistic innovation in India’s financial ecosystem. By fostering regulatory collaboration, it opens doors for next-gen FinTech solutions that are not confined by traditional boundaries.