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The Reserve Bank of India (RBI) has announced the selection of five entities for the Test Phase of the Fifth Cohort (Theme Neutral) under its Regulatory Sandbox, following the announcement made in October 2023. The selected entities will commence testing of their solutions from August 2024.
The selected entities and their solutions are:
Connectingdot Consultancy Pvt. Ltd.: Predictive analytics for loan defaults with borrower-specific risk mitigation recommendations. Epifi Technologies Pvt. Ltd.: Digital onboarding of NRE/NRO accounts for NRIs through video KYC and identity verification, reducing turnaround time and physical documentation. Finagg Technologies Pvt. Ltd.: Blockchain-based deep tier vendor financing solution enabling MSMEs in supply chains to access affordable credit using tokenized receivables.
Indian Banks’ Digital Infrastructure Company (IBDIC) Pvt. Ltd.: Blockchain and smart contract-based deep tier financing platform facilitating MSMEs’ access to finance linked to anchor invoices. Signzy Technologies Pvt. Ltd.: Unassisted video KYC solution allowing customers to complete KYC independently, reducing time and customer drop-offs.
[RBI]
In a separate development, the RBI has imposed monetary penalties on three Payment System Operators (PSOs) for non-compliance with regulatory provisions:
Monetary Penalties:
Manappuram Finance Ltd.: ₹41.50 lakh (non-compliance with KYC directions).
Ola Financial Services Pvt. Ltd.: ₹33.40 lakh (non-compliance with KYC directions).
Compounding Orders:
Ola Financial Services Pvt. Ltd.: ₹54.15 lakh (escrow account shortfall).
Visa Worldwide Pte. Ltd.: ₹240.75 lakh (implementation of payment authentication solution without RBI clearance).
The actions were taken under Sections 30 and 31 of the Payment and Settlement Systems Act, 2007, based on deficiencies in regulatory compliance. The penalties and compounding orders do not affect the validity of any transactions or agreements entered into by the entities with their customers.
The RBI had issued notices to the entities, allowing them to respond and present oral submissions during personal hearings, after which the penalties and compounding orders were confirmed.