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The International Financial Services Authority ( IFSCA ) has issued a consultation paper on the Draft IFSCA FinTech…

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  • The International Financial Services Authority ( IFSCA ) has issued a consultation paper on the Draft IFSCA FinTech…


The International Financial Services Authority (“IFSCA”) has issued a consultation paper on the “Draft IFSCA FinTech Sandbox Framework” dated September 19, 2025 (herein referred as “Draft Framework”) to facilitate growth of fintech innovations at IFSCs across Indian and foreign jurisdictions.

Objectives of the Draft Framework

  • To promote the development and deployment of financial technology (FinTech) solutions that give rise to new business models, applications, processes, or products in areas and activities linked to financial services regulated by IFSCA.
  • To facilitate the adoption of advanced and innovative technology-driven solutions (TechFin) that support and enhance activities related to financial products, financial services, and financial institutions.

Key Highlights of the Draft Framework

ParticularsDetails
1. Applicability
  • Applicable to eligible domestic and foreign entities desirous of obtaining Limited Use Authorisation as FinTech Sandbox Entity (FSE) from IFSCA.
  • Applicable to FinTech Entities having valid Limited Use Authorisation under the “Framework for FinTech Entity in IFSCs” dated April 27, 2022.
2. Key Definitions
  • FinTech: Includes financial technology products and/or solutions resulting in new financial business models, applications, processes, financial products/services or innovative technology solutions regulated or likely to be regulated by the Authority.
  • FinTech Sandbox Entity: Means an entity granted Limited Use Authorisation by IFSCA under this framework and includes Domestic FinTechs and Foreign FinTechs.
  • Inter-Operable Regulatory Sandbox (IoRS): Means a testing environment for innovative hybrid financial products/services falling within regulatory ambit of more than one domestic financial sector regulator.
  • Testing Partner: Means an institution engaged in providing financial products/services or assisting activities relating to financial products, services or institutions and having an MoU or similar arrangement with the applicant.
3. Eligibility
  • Applicant proposing innovative technology in core products, services or business models related to financial products/services regulated or likely to be regulated by IFSCA.
  • Proposed FinTech ideas/products/solutions must significantly enhance existing financial services/products and incorporate adequate risk management strategies.
  • Applicants from India may include:
    • Company incorporated under Companies Act, 2013 or LLP under LLP Act, 2008.
    • Branch of Indian company or LLP in IFSC.
    • DPIIT registered FinTech start-up entity.
    • Entity regulated by domestic financial sector regulator.
    • Individual/group affiliated with recognised research or academic institutions.
  • Applicants from jurisdictions not recognised as FATF high-risk jurisdictions may include:
    • Individuals or groups affiliated with recognised research or academic institutions.
    • Entities including financial institutions.
  • Applicant shall confirm suitability under International Financial Services Authority (TechFin and Ancillary Services) Regulations, 2025.
4. Application ProcessThe Draft Framework provides provisions relating to:
  • Application and approval process.
  • Regulatory relaxation/exemptions.
  • Sandbox exit procedure.
  • Revocation of Limited Use Authorisation.
5. FinTech Regulatory Sandbox (FRS)A testing environment where FinTech Sandbox Entities can test FinTech products and solutions in a live environment during the sandbox period.
6. FinTech Innovation Sandbox (FIS)Enables FinTech Sandbox Entities to develop and test FinTech ideas, products or solutions in isolation from live markets using market-related data.
7. Inter-operable Regulatory Sandbox (IoRS)Domestic and foreign FinTech firms having products/services falling under more than one domestic financial sector regulator may access IoRS.
8. Overseas Regulatory Referral Mechanism / FinTech BridgesAccess shall be governed through MoUs, collaborations or special arrangements between IFSCA and overseas financial sector regulators.
9. Activities Qualifying for FinTech
  • Capital Markets including Corporate Finance, Sustainable Finance, Market Infrastructure Institutions and Investment Funds.
  • Banking including Finance Companies, Payment Services and Payment & Settlement Systems.
  • Insurance.
  • Pension.
  • Metals and Commodities.
  • Foreign University.
  • Financial Support Services.
  • Compliance and supervision of regulated areas.
  • Any other area permitted by the Authority.

Comments / Suggestions Submission Format

DetailsInformation Required
Name and Details of Person/EntityTo be provided by stakeholder
Organisation NameIf applicable
Contact DetailsPhone Number and Email Address
Feedback Format
  • Clause No.
  • Sub-clause
  • Comments/Suggestions/Feedback
  • Detailed Rationale
  • Industry best practices comparable with parallel jurisdictions

Email: fe-sandbox@ifsca.gov.in

Copy to:

  • Shri Joseph Joshy CJ, CGM & HoD, Department of Technology, IFSCA
  • Shri Mohit Kumar Nayak, Manager, IFSCA
  • Shri Amal P S, Manager, IFSCA

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