Regulatory body IRDAI unveils Frequently Asked Questions on interconnected regulatory sandbox, aiming to stimulate financial technology innovation
The Insurance Regulatory and Development Authority of India (IRDAI) has published a Standard Operating Procedure (SOP) for the Inter-Operable Regulatory Sandbox (IoRS) on September 19, 2025. This move aims to foster innovation in the financial ecosystem by providing a common window for innovators to test hybrid financial products/services falling within the regulatory ambit of more than one financial sector regulator.
The Inter-Regulatory Technical Group on FinTech (IRTG on FinTech), constituted under the Financial Stability and Development Council-Sub Committee (FSDC-SC), has prepared the SOP for IoRS. The IRTG on FinTech consists of members from Financial Sector Regulators/Authority (RBI, SEBI, IRDAI, IFSCA, and PFRDA), the Department of Economic Affairs (DEA), the Ministry of Finance, and the Ministry of Electronics and Information Technology (MeITY), GoI.
The SOP for IoRS allows companies and institutions involved in testing innovative financial products/services across multiple financial sector regulators outside IRDAI to participate. This includes FinTech companies, InsurTech firms, WealthTech firms, financial institutions, RegTech providers, start-ups, or other innovators offering products/services relevant to multiple financial sectors.
Some of the innovative solutions that can be tested under IoRS include RegTech and SupTech, Digital Payment Solutions, Cross-sectoral products (e.g., insurance products linked to banking services), InsurTech, WealthTech, and Cross-Border payment solutions.
The IoRS simplifies testing processes and encourages the development of hybrid financial products/services. There is no deadline for applications to the IoRS, and they are accepted on an 'On-Tap' basis throughout the year.
The IRTG on FinTech has also taken up discussions on issues relating to hybrid products/services for admission in the Regulatory Sandbox. The terms of reference (ToR) of IRTG on FinTech included the framing of a Standard Operating Procedure (SOP) for IoRS for such hybrid products/services.
This article does not contain any new facts about Pension Fund Regulatory and Development Authority (PFRDA) allowing Pension Funds to freely bring in money for innovative ways of financing, Colab Platforms forays into drone tech with RRP Group tie-up, or SEBI chief urging faster infrastructure asset monetisation or a broader investor base.
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