Nepal central bank drafts fintech sandbox rules

Nepal's central bank is paving the way for financial technology innovation with its newly drafted Regulatory Sandbox Guidelines. The Nepal Rastra Bank (NRB) aims to create a supportive environment for developing and deploying new technology-enabled financial products and services.

The proposed sandbox is specifically designed for fintech innovators and other financial service providers. It offers a structured platform for live market testing under supervision before a full commercial launch. This framework is intended to facilitate evidence-based assessments of emerging financial innovations while ensuring consumer protection and financial system stability.

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This will help fintech companies assess the commercial viability of their products and identify potential technical and operational issues before full-scale deployment.

Sudha Shrestha, deputy spokesperson at NRB, explained that the guidelines will allow banks, payment service providers, and licensed fintech companies to test products in a simulated setting. "This will help fintech companies assess the commercial viability of their products and identify potential technical and operational issues before full-scale deployment," she said. Participants will not incur any fees for testing within the sandbox.

Industry stakeholders have lauded the initiative. Praveen Regmi, CEO of IME Khalti, noted that current regulations don't cover all fintech solutions due to rapid technological evolution. "The guidelines will support the development and testing of new products while allowing regulators and industry players to better understand associated risks," Regmi stated. He added that regulatory sandboxes are a globally recognized tool that can enhance collaboration between innovators and regulators on risk management, transparency, and consumer protection.

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The guidelines will support the development and testing of new products while allowing regulators and industry players to better understand associated risks.