Fi.Money, FinAGG and Signzy Selected for RBI Regulatory Sandbox

The neutral theme group will be tasked with incubating innovative products or services across functions within the RBI regulatory domain

Five entities were selected for the “test phase” out of 22 applications and will start testing their solutions next month

Regulatory sandboxes allow companies to test new products or services in a controlled regulatory environment.

The Reserve Bank of India (RBI) has selected five entities, including three startups, for the fifth edition of its regulatory sandbox initiative.

The selected startups are Epifi Technologies (Fi.Money), Finagg Technologies (FinAGG) and Signzy Technologies. Connectingdot Consultancy and Indian Banks’ Digital Infrastructure Company (IBDIC) have also been selected for the project.

For the uninitiated, regulatory sandboxes allow companies to test new products or services in a controlled regulatory environment. This, in turn, allows these entities to scale their offerings, increase efficiency, and develop solutions to new-age problems.

The thematic-neutral group will seek to incubate “innovative” products or services across functions within the RBI’s regulatory domain. In a statement, the central bank said five entities had been selected for the “test phase” out of 22 applications it had received.

It was also announced that selected entities will begin testing their solutions next month.

As part of the sandbox initiative, Epifi Technologies will develop a solution to enable digital account opening for non-residents (external) and non-residents (regular) via video KYC and “identity validation.”

The central bank said the proposed Epifi facility will enable seamless account opening for Non-Resident Indians (NRIs) by eliminating the need for physical documentation and verification. It also said the offering will bring efficiency as well as reduce cost and turnaround time.

Meanwhile, FinAGG will build a blockchain-based deep tier vendor financing solution that will enable financing for SMEs in the supply chain of large enterprise orders. The offering will enable the conversion of receivables from these enterprises into blockchain-based tokens that can be exchanged by SMEs for loans from banks and NBFCs.

In addition, Signzy intends to develop a KYC solution for video conferencing that will not require user assistance and will enable users to independently conduct the KYC procedure via video conferencing without human intervention.

“The (Signzy) solution aims to reduce time, increase success rates, significantly reduce customer abandonment and ensure a smooth and efficient KYC process for both customers and regulated entities,” the statement added.

RBI has invited eligible entities to apply for the fifth edition of the sandbox initiative, which will be held in September 2023.

In late 2019, the central bank invited applications from a first group on the topic of “retail payments.” A second group focused on cross-border payments was then selected in December 2020.

Following this, the third batch was announced under the theme ‘MSME Loans’ in September 2021. The central bank also selected six fintech startups, including Bahwan Cybertek, Crediwatch Information Analytics and Wibmo, as part of the fourth batch of the regulatory sandbox initiative last year.

The sandbox project paved the way for the emergence of startups like ToneTag, Citycash and IND-e-Cash, whose use cases include audio-based UPI payments and digital payments for basic feature phones.