Maharashtra government unveils 'sandbox' to aid startups to develop Mumbai into fintech hub

In its efforts to develop the financial capital into a fintech hub, the Maharashtra government today announced a 'sandbox' to aid startups in the space. Maharashtra, the first state to have a dedicated fintech policy, is also planning to have a dedicated 'Fintech Officer' in the Department of Information Technology, Chief Minister Devendra Fadnavis said at the inauguration of the Mumbai Fintech Festival here. "The sandbox will be opened today. In this sandbox, all the startups will be welcome. They can register, they can open their APIs (application programming interface) and banks can consume," S V R Srinivas, Principal Secretary (information technology), said.

It can be noted that in a report released in February, a Reserve Bank panel had recommended introducing a "regulatory sandbox" to foster financial technology innovation. Generally, sandbox is seen as a safe zone to test financial innovation which sees a limited rollout of new products to select customers.

Srinivas exhorted banks and non-bank lenders to open their APIs in order to help the startups in the state. The government is also starting a virtual fintech registry, the senior bureaucrat said.

Other states have shown interest in partnering with Maharashtra, Srinivas said, adding an agreement will be signed with the Government of Andhra Pradesh which is also working on developing Vishakhapatnam into a fintech hub.

Srinivas said Maharashtra's efforts are aimed at creating the entire ecosystem which will help the fintech industry flourish, starting with four accelerators.

Fadnavis said as part of the fintech policy, the state has given sops like tax benefits, financial incentives and cheaper electricity and Internet connectivity for industry players.

The state held a blockchain conference last year and lenders like SBI, Yes Bank and Kotak Mahindra Bank have already entered into specific tie-ups on that front, Srinivas said.

As part of the two-day festival, the state government is also holding a hackathon, but Srinivas said there will not be more of such hackathons in the future.