<h1 class="ql-align-center">Regulatory Sandbox (RS)</h1> <h2>Context:</h2> <ul><li>Reserve Bank of India (RBI) announced the opening of the third cohort of Regulatory Sandbox</li></ul> <h2>About:</h2> <ul><li>Regulatory Sandbox (RS) refers to live testing of new products or services in a controlled regulatory environment for which regulators may (or may not) permit certain regulatory relaxations for the limited purpose of the testing.</li></ul> <ul><li>It allows market participants to collect evidence on the benefits and risks of new financial innovations.</li></ul> <ul><li>It can provide a structured avenue for the regulator to engage with the ecosystem and to develop innovation-enabling regulations that facilitate the delivery of relevant, low-cost financial products.</li></ul> <ul><li>The theme for the Third Cohort will be 'MSME Lending'. </li></ul> <ul><li>RBI has invited applications for the first cohort with the theme of 'Retail Payments' in 2019 and for the Second Cohort with the theme of 'Cross Border Payments' in 2020.</li></ul>