Posts

The Sabka Bima Sabki Raksha Insurance Bill: The 2047 Vision in action

/0 Comments/in , , /by

– Vinita Nair and Saloni Khant | corplaw@vinodkothari.com

– Updated on May 3, 2025

Being the 10th largest[1] in the world, the Indian Insurance market grows at 10-15% annually but insurance penetration is only at 3.7% of the GDP[2] as against the global average of 7.3%. With a view to boost growth in the sector and implement the vision of ‘”Insurance for All by 2047’, amendments in the existing insurance laws were placed before the public for consultation in November, 2024. Following the due process of legislation, the draft bill underwent several changes, was passed by both the houses of the parliament, assented to by the president and finally notified in the Official Gazette as the Sabka Bima Sabki Raksha (Amendment Of Insurance Laws) Act, 2025 (“Amendment Act”) on December 21, 2025. The Amendment Act, that amends the Insurance Act, 1938, Life Insurance Corporation Act, 1956 and Insurance Regulatory and Development Authority Act, 1999, introduces fundamental reforms by liberalising foreign investments and reducing capital requirements but at the same time, strengthens regulatory oversight on the market participants with additional measures to protect the interest of the policyholders.

The Amendment Act became effective from February 5, 2026. The amendment relating to prohibition on common MD and officers among insurance companies, banking companies and investment companies (Section 32A of the Insurance Act), has not been made effective, in view of industry representation made to IRDA, refer the discussion below.

Read more →

IRDAI is a step closer to the vision of Insurance for All by 2047

/0 Comments/in /by

– Surabhi Chura | corplaw@vinodkothari.com

The Insurance Regulatory and Development Authority of India (IRDAI) has been committed to nurturing a regulatory environment to accomplish its vision, undertaking significant steps towards ensuring that insurance products and services are accessible to all segments of society. At the 125th meeting held on March 19, 2024, the Authority approved the consolidation of 34 regulations into 6 and 2 new regulations after reviewing the existing regulatory framework in the insurance sector. These regulations span crucial areas such as the protection of policyholders’ interests, responsibilities towards rural and social sectors, the establishment of an electronic insurance marketplace, regulation of insurance products, and the operation of foreign reinsurance branches. Additionally, they cover aspects related to registration, actuarial practices, finance, investment, and corporate governance highlighting IRDAI’s focus on making regulations clearer and more effective.

These regulations result from consultations with a diverse range of stakeholders, including experts in the insurance industry, representatives, and the general public. The new regulations have been notified vide separate gazette notifications on 22nd  March 2024 and onwards.

More: IRDAI is a step closer to the vision of Insurance for All by 2047

Outlined below are the key highlights of the regulations approved:

Erstwhile Regulations New Regulations 
IRDAI (Obligation of Insurers to Rural and Social Sectors) Regulations, 2015IRDAI (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024
IRDAI (Obligation of Insurer in Respect of Motor Third Party Insurance Business) Regulations, 2015.
IRDAI (Registration of Indian Insurance Companies) Regulations, 2022IRDAI (Registration, Capital Structure, Transfer of Shares and Amalgamation of Insurers) Regulations, 2024
IRDAI (Other Forms of Capital) Regulations, 2022
IRDAI (Manner of Assessment of Compensation to Shareholders or Members on Amalgamation) Regulations, 2021
IRDAI (Issuance of Capital by Indian Insurance Companies transacting other than Life Insurance business) Regulations, 2015
IRDAI (Issuance of Capital by Indian Insurance Companies transacting Life Insurance Business) Regulations, 2015
IRDAI (Scheme of Amalgamation and Transfer of Life Insurance Business) Regulations,2013
IRDA (Scheme of Amalgamation and Transfer of General Insurance Business)Regulations, 2011
IRDAI (Micro Insurance) Regulations, 2015IRDAI (Insurance Products) Regulations, 2024
IRDAI (Minimum Limits for Annuities and other benefits) Regulations, 2015
IRDAI (Acquisition of Surrender and Paid up values) Regulations, 2015
IRDAI (Health Insurance) Regulations, 2016
IRDAI (Unit Linked Insurance Products) Regulations, 2019
IRDAI (Non-Linked Insurance Products) Regulations, 2019
IRDAI (Lloyd’s India) Regulations, 2016IRDAI (Registration and Operations of Foreign Reinsurers Branches & Lloyd’s India) Regulations, 2024
IRDAI (Registration and Operations of Branch Offices of Foreign Reinsurers other than Lloyd’s) Regulations, 2015
IRDAI (Actuarial Report and Abstract for LifeInsurance Business) Regulations, 2016IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations, 2024
IRDAI(Distributions of Surplus) Regulations,2002
IRDAI (Assets, Liabilities and Solvency Margin of Life Insurance Business) Regulations, 2016
IRDAI (Assets, Liabilities and Solvency Margin of General Insurance Business) Regulations, 2016
IRDAI (Appointed Actuary) Regulations,2022
IRDAI(Investment) Regulations, 2016
IRDAI (Preparation of Financial Statements and Auditors’ Report of Insurance Companies) Regulations, 2002 
IRDAI (Inspection and Fee for Supply of Copies of Returns) Regulations, 2015
IRDAI (Loans or Temporary Advances to Full Time Employees of the Insurers) Regulations, 2016
IRDAI (Manner of Receipt of Premium) Regulations, 2002IRDAI (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024
IRDAI  (Places of Business) Regulations, 2015
IRDAI (Fee for registering cancellation or change of nomination) Regulations 2015
IRDAI  (Fee for granting written acknowledgment of receipt of Notice of Assignment or Transfer) Regulations, 2015
IRDAI (Issuance of e-Insurance Policies) Regulations, 2016
IRDAI (Outsourcing of Activities by Indian Insurers) Regulations, 2017
IRDAI (Protection of Policyholders’ Interests) Regulations, 2017
IRDAI (Insurance Advertisements and Disclosure) Regulations, 2021

Further, 2 new Regulations have been notified namely – 

While the new Regulations primarily consolidate the existing Regulations as stated above, these also bring in certain new requirements and relaxations for the insurers. In this article, we attempt to discuss the changes brought by the IRDAI (Registration, Capital Structure, Transfer of Shares and Amalgamation of Insurers) Regulations, 2024 (“Registration Regulations, 2024”), and the implications thereof. The amendments in the new regulation are as follows:

  • Insertion of the definition of Competent Authority
  • Withdrawal of application of registration as insurer
  • Non-applicability of lock-in for listed insurers 
  • Issuance of shares at face value and in the same proportion 
  • Temporary relaxation from restrictions on investment by the promoter of the insurer
  • Fit and Proper Criteria
  • Basis of valuation of equity shares of promoter SPV of insurer
  • Relaxation in lock-in requirements
  • Reduction in lock-in requirements for shareholding in the insurer
  • Nomination of Director
  • Prior approval of IRDA for the listing of the insurer

Effective date 

The effective date of the Registration Regulations, 2024 shall be the date of publication in the official gazette, i.e., 20th of March 2024.

New requirements introduced vide the Registration Regulations, 2024

Regulation No.Topic Text of the Regulation Our Remarks 
2 (g) Competent AuthorityCompetent Authority means Chairperson or Whole-Time Member or Committee of the Whole-Time Members or Officer(s) of the Authority, as may be determined by the Chairperson. The concept of “Competent Authority” has been introduced, vide which the recognition of delegated authority has been made explicit in the Regulations. 

In the Registration Regulations, 2024, the reference to the “Authority”, i.e., IRDAI has been substituted with “Competent Authority” in a few matters like approval for the R1 stage, extension for commencement of business, withdrawal of application, etc. where powers have been delegated to the Competent Authority. 
6(7)Withdrawal of application of registration as insurer(a) Any applicant may apply to the Competent Authority for withdrawal of the application for registration at any stage of application, along with reasons.  

(b) The Competent Authority may approve or reject the said request for withdrawal for the reasons to be recorded in writing. 

(c) In case of rejection of request for withdrawal of application, the R1 application or R2 application, as the case may be, may be rejected in accordance with Regulation 6(6)		The Erstwhile Regulations did not contain express provisions with respect to the withdrawal of registration by a proposed insurer, however, the conditions for disqualification of an applicant included a case of withdrawal of the former application by the applicant.The manner in which an application may be withdrawn by an issuer has been specifically provided for under the Registration Regulations 2024. 
12(3)Issuance of shares at face value and in the same proportion Till the time of commencement of insurance business:(i)The equity shares of the Applicant and SPV shall be issued at its face value; 

(ii)The infusion of funds in the Applicant and SPV, by its shareholders, shall be commensurate with the percentage of their equity stake in the Applicant and SPV:

Provided that the issuance of equity shares of insurer or SPV may be permitted to be issued at premium, after the commencement of business.		Till the commencement of business of the insurer, shares are to be issued at face value only and to the existing shareholders in proportion to their existing holding indicating maintenance of a similar shareholding pattern from application till actual commencement of business.This should ideally mean the commencement of business operations as an insurer, and not obtaining the certificate of commencement as under Section 10A of the Companies Act, 2013.
Proviso to Reg 13(1)Temporary relaxation from restrictions on investment by the promoter of an insurerProvided that the Competent Authority may permit a person to be promoter of more than one insurer engaged in the same class of insurance business on a temporary basis if the same is part of the Scheme filed with the Authority under section 35 of the Act. The new proviso facilitates the provision of temporary relaxation by the Competent Authority for a person to act as a promoter in more than one insurer of the same if it is a part of the scheme of amalgamation or transfer filed with the Authority. 
Schedule 1Fit and Proper Criteria(c) Compliance with all applicable laws in India including Prevention of Money Laundering Act, FEMA and taxation law.
Specific reference to the Prevention of Money Laundering Act has been introduced.

Express mention of the term “individual” to signify applicability to individuals along with entities. The Erstwhile Regulations referred to “entity” only. However, even before the insertion, the insurer and the promoters were required to ensure compliance with the criteria. The interpretation before the insertion was the same.  

Amendments to existing requirements under Erstwhile Regulations 

Regulation No.Topic Provisions under Registration Regulations, 2024 vis-a-vis Erstwhile RegulationOur Remarks 
8Relaxation in lock-in requirements Provided that the Competent Authority may relax the lock-in period in following circumstances:
i.(i) To enable the insurer to list its shares on the stock exchange(s) in India.; or
(ii) Under circumstances of distressed financial position or, amalgamation or reorganization pursuant to change in applicable law of the any insurer or the its shareholder(s):

Provided further that the lock-in period shall not be applicable in case of equity shares allotted to employees or directors of the insurer pursuant to any scheme formed for the benefit of the employees or directors of the insurer: 

Provided further that the lock-in period shall not be applicable in case of investor holding not more than one percent of the equity shares of the insurer.
Exemption at the discretion of the Competent Authority:

The new Registration Regulations, 2024 contain enabling powers with the Competent Authority to provide relaxation from lock-in in case of circumstances of distressed financial position or amalgamation/ re-organisation pursuant to legal requirements. 

Absolute exemptions: 
Exemption is given from the applicability of lock-in period for: a. investor holding less than 1% of insurer’s equity; or b.  Shares are held under employee benefit scheme. 
8Reduction in lock-in requirements for shareholding in insurerInvestment after 10 years but before 15 years post grant of R3:

In case of change in shareholding pattern:
Promoter: 2 years from the date of investment
Investor: 1 year from the date of investment

Investment after 15 years post grant of R3
Promoter: 1 year from the date of investment
Investor: Nil		The Erstwhile Regulations required prior approval of IRDAI before listing of shares of the insurer. Under the new Regulations, 2024, only prior intimation is required subject to satisfaction of the following conditions:
I. Listing of equity shares is in the interests of policyholders;
II. The insurer shall comply with the regulatory framework. 
III. The listing of equity shares shall not be used as a medium to raise capital or transfer shares which would be in contravention of the applicable regulatory provisions.
IV. The insurer shall seek approval for the transfer of shares. 
V. The insurers specified under section 10A of the General Insurance Business (Nationalization) Act, 1972 shall ensure compliance with the provisions of section 10B of the said Act.
VI. Such other conditions as may be specified.
10Basis of valuation of equity shares of promoter SPV of insurerThe equity shares to be issued by the SPV shall be valued at a price determined on the basis of valuation certificate issued by two one SEBI Registered Category-I Merchant Banker.Valuation of shares of the SPV can be determined based on a valuation certificate issued by one SEBI Registered Category-I Merchant Banker instead of two as required under the Erstwhile Regulations
16Nomination of DirectorProvided that the investor may nominate a director on the Board of the insurer if its investment exceeds 10 percent of the paid up capital of the respective insurer.

New Regulations
1.The investors may nominate not more than one director on the Board of the insurer if its investment exceeds 10 percent of the paid-up capital of the respective insurer.
2. If the investment in the insurer does not exceed ten percent of the paid-up capital of the respective insurer. The investor shall not nominate any director on the Board
3. No shareholder shall nominate any director on the board of any insurer if it has already nominated a director on the board of any other insurer engaged in the same class of insurance business.		The 2024 Regulations provide stringent requirements with respect to the appointment of a nominee director, allowing only 1 nominee director to be appointed. 
Further, the restriction of appointing only one nominee director is across insurers. 

Will this mean that an investor and the insurer can not mutually agree to have representation on the insurer’s Board or, seek express permission from the Authority for such representation?


29Prior approval of IRDA for listing of insurer No Indian insurance company transacting the General insurance or Health insurance or Reinsurance business shall approach the SEBI for public issue of shares and for any subsequent issue, by whatsoever name called, under the ICDR Regulations without the specific previous approval of the Authority in writing under these Regulations.

New Regulations:
An insurer may approach the appropriate financial sector regulator for listing of its equity shares, by way ofdivestment of equity shares by existing shareholders or fresh issue of equity shares by the insurer or both, on thestock exchange(s) recognized under Securities Contracts (Regulation) Act, 1956 upon fulfilment of following conditions:
(1) The Board of the insurer resolves that such listing of equity shares is in the interests of policyholders.
(2) The Board of the insurer resolves that the insurer shall be able to comply with the regulatory stipulations of the said financial sector regulator(s).
(3) The listing of equity shares on stock exchange(s) shall not be used as medium to raise capital or transfershares which would otherwise be in contravention to the applicable regulatory provisions.
(4) All the regulatory provisions stipulated by the Authority shall be complied with scrupulously.(5) The insurer shall have obtained prior approval for transfer of shares for offer for sale and/or fresh issuanceof shares, as may be required vide section 6A of the Act read with Regulation 21 of these regulations:Provided that the submission of the details of transferee shall not be mandatory.
(6) The insurers specified under section 10A of the General Insurance Business (Nationalization) Act, 1972shall ensure compliance with the provisions of section 10B of the said Act.
(7) The insurer shall file an intimation with the Authority at least 15 days before it approaches the appropriate financial sector regulator for listing of its equity shares. The insurer shall also keep the Authority informed regarding the subsequent developments in the said matter.
(8) Any documents filed by the insurer under this chapter or any communications between insurer and the Authority with regard to proposed listing of equity shares shall not in any manner be deemed to be orserve as a validation by the Authority of the facts, representations, assertions or anything written in theoffer documents. This fact shall be disclosed in bold letters in the offer document.
(9) Such other conditions as may be specified.		The Erstwhile Regulations required prior approval of IRDAI before listing of shares of the insurer. Under the new Regulations, 2024, only prior intimation is required subject to satisfaction of the following conditions:
I. Listing of equity shares is in the interests of policyholders;
II. The insurer shall comply with the regulatory framework. 
III. The listing of equity shares shall not be used as a medium to raise capital or transfer shares which would be in contravention to the applicable regulatory provisions.
IV. The insurer shall seek approval for the transfer of shares. 
V. The insurers specified under section 10A of the General Insurance Business (Nationalization) Act, 1972 shall ensure compliance with the provisions of section 10B of the said Act.
VI. Such other conditions as may be specified.

Conclusion

One of the key objectives of the IRDAI includes the promotion of competition to enhance customer satisfaction through increased consumer choice and fair premiums while ensuring the financial security of the Insurance market. The Registration Regulations, 2024 largely revolve around encouraging and providing flexibility to the insurers in notable areas like registration, lock-in relaxations, and listing of the insurers.  By consolidating regulations, the process of starting and operating an insurance company is expected to become more efficient, having a single regulation may improve clarity and transparency for insurers regarding these processes, and a simplified procedure would encourage investment and participation in the Insurance Sector. The consolidation of various regulations is a step to pave the way for a more inclusive insurance sector, attracting new insurers, and ultimately achieving IRDAI’s vision of ‘Insurance for All’ by 2047.

Our resource centre on Insurance Law can be accessed here.

What’s new under the IRDAI’s Exposure Draft on Expenses of Management Regulations?

/0 Comments/in , /by

-Mahak Agarwal, Executive (corplaw@vinodkothari.com)

On 14th November, 2023, the IRDAI released an Exposure Draft EOM Regulations, 2023 (‘Exposure Draft’) which proposes to repeal the following regulations:

  1. Insurance Regulatory and Development Authority of India (Expenses of Management of Insurers transacting General or Health Insurance Business) Regulations, 2023;
  2. Insurance Regulatory and Development Authority of India (Expenses of Management of Insurers transacting Life Insurance Business) Regulations, 2023 and
  3. Insurance Regulatory and Development Authority of India (Payment of Commission) Regulations, 2023.

The Exposure Draft is seemingly a consolidation of the aforesaid regulations with a few modifications. Further, most of these so-called modifications are essentially in the nature of rephrasing certain statements, for instance, formulation of business plan ‘in advance’ being replaced with ‘prior to commencement of financial year’.

Read more →

IRDAI does comprehensive liberalisation of insurance regulations

/0 Comments/in /by

– Neha Malu, Senior Executive | corplaw@vinodkothari.com

Admittedly with the ambition to develop an economy where every citizen has appropriate life, health and property insurance cover and every enterprise is supported by appropriate insurance solutions, and also to make Indian insurance sector globally attractive, Insurance Regulatory and Development Authority of India (‘IRDAI’) has made comprehensive changes in insurance regulations. IRDAI in its 120th meeting held on 25th November, 2022 had discussed at length the reason behind notifying such changes in IRDAI regulations and the same is expressed to fulfil its objective of achieving ‘Insurance for all by 2047’[1]. All the below discussed amendments were notified vide gazette notification dated 5th December, 2022.

The amendments notified are applicable with immediate effect and are generally speaking in the nature of liberalisation measures.  Among the changes, a noteworthy amendment is doing away with obtaining prior approval of IRDAI every time an Insurance company goes for raising money by way of issuance of ‘Other forms of Capital’. Further, the maximum limit of money that can be raised through this route has also been increased which will provide for an easy flow of money into an insurance company. Additionally, allowing a subsidiary company to be a promoter in an insurance company subject to the specified compliances is another significant amendment that has been notified.     

Read more →

One-stop guide for all Regulatory Sandbox Frameworks

/0 Comments/in /by

-Kanakprabha Jethani (kanak@vinodkothari.com)

Background

The International Financial Services Centres Authority Act, 2019 was enancted on December 19, 2019, providing powers to the International Financial Services Centres Authority (IFSCA) to regulate financial products, financial services and financial institutions in the International Financial Services Centres. Under such powers, the IFSCA has on October 19, 2020, introduced a Regulatory Sandbox (RS) framework[1], to develop a world-class FinTech hub at the IFSC located at GIFT City in Gandhinagar. Under the said framework, entities operating in the capital market, banking, insurance, and financial services space shall be granted certain facilities and flexibilities to experiment with innovative FinTech solutions in a test environment. The framework details among other things the eligibility criteria, applicability, process of application, and regulatory exemption for operating in the RS..

Further, there are already separate RS frameworks issued by the sectoral regulator for various market participants. Hence, it becomes crucial to understand the unique offering of this IFSC framework. The below write-up intends to discuss the same.

What is Regulatory Sandbox?

Regulatory sandboxes or RS is a framework that allows innovative projects to undergo live testing in a controlled environment where the regulator may or may not permit certain regulatory relaxations or may provide certain additional facilities for testing.

The objective is to allow new and innovative projects to conduct live testing and enable the approach of learning by doing. RSs are created to facilitate the development of potentially beneficial innovations, which are otherwise barred to operated due to the construct of the existing regulatory framework of the country.

We have a separate write-up on the concept, benefits, limitations and the history of RS, which may be referred here- https://vinodkothari.com/2019/04/safe-in-sandbox-india-provides-cocoon-to-fintech-start-ups/

Basic features of the IFSC RS Framework

The framework allows any person, including individuals, to make an application under the RS. This is a unique feature that allows not only businesses but students, researchers as well as professionals to apply. However, there is a geographical limit to this RS. It can only operate within IFSC GIFT city. Further, considering the need for information in such projects, the framework, as an additional step, shall provide the participants with access to market-related data, particularly, trading and holding data, which is otherwise not readily available, to enable them to test their innovations effectively before the introduction of such innovations in a live environment.

Comparison of basic features of various RS frameworks

Features IFSC framework RBI framework[2] SEBI framework[3] IRDA framework[4]
Frequency of application This is an on-tap framework. Hence, an application may be made anytime. Based on the cohort framework i.e. end-to-end sandbox. The RBI rolls out a theme based cohort, say digital payments, under which fintech intending to provide services relating to the theme shall apply.[5]

 

Applications can be made only when a cohort is live.

 This is an on-tap framework. Hence, an application may be made anytime Based on the cohort approach.[6]
Applicability/Eligibility to apply Following intending to operate in the IFSC GIFT city.

·   All entities registered with SEBI, RBI,  IRDAI and PFRDA

·   All startups registered with Startup India and meeting the criteria of a start-up[7]

·   Companies incorporated and registered in India

·   Companies  incorporated  and  regulated  in FATF compliant  jurisdictions

·   Individuals who are citizens of India

·   Individuals from FATF compliant jurisdiction[8]

 Fintech companies including startups, banks, financial institutions and any other company partnering with or providing support to financial services businesses which satisfies the detailed eligibility criteria laid down.[9] Entities registered with SEBI under section 12 of SEBI Act, 1992 ·   Insurers

·   Insurance intermediaries

·    any person (other than individual) having net worth of Rs. 10 lakhs or more in the previous financial year

·   Any other person recognized by IRDAI
Purpose Adding significant value to the existing offering in the capital market, banking, insurance or pensions sector in India/IFSC. For the introduction of innovative Products/Services in retail payments, money transfer services, marketplace lending, digital KYC, financial advisory services, wealth management services, digital identification services, smart contracts, financial inclusion products, cybersecurity products, mobile technology applications, data analytics, API services, applications under blockchain technologies, Artificial Intelligence and Machine Learning applications Adding  significant  value to the existing offering in the Indian securities market For promoting or implementing innovation in

insurance in India in any one or more of the following categories:

(a) Insurance Solicitation or Distribution

(b) Insurance Products

(c) Underwriting

(d) Policy and Claims Servicing

(e) Anv other category recognised by the Authority.
Timeline for review of the application 30 working days Around 4 weeks + 4 weeks + 3 weeks (including preliminary screening, test design, and application assessment) 30 days No timeline prescribed under the regulations
Testing duration Maximum 12 months, extendable upon request Maximum 12 weeks, extendable on request Maximum 12 months, extendable upon request Maximum 6 months, extendable on request
Exclusions No such exclusions

 

 

 

 

 

 

 

 

 

 

 RS  shall not be available for the following:

·       Credit registry

·       Credit information

·       Crypto currency/Crypto assets services

·       Trading/investing/settling in crypto assets

·       Initial Coin Offerings, etc.

·       Chain marketing services

·       Any product/services which have been banned by the regulators/Government of India.

 

 No such exclusions No such exclusions
Extending or exiting the RS ·      At the end of the testing period, relaxations provided on regulatory requirements shall expire.

·      Upon completion of testing, IFSCA shall decide whether to permit the innovation to be introduced.

·      The applicant may request for an extension period

·      The applicant may exit the sandbox on its own by giving a prior notice to IFSCA.

 ·      At the end of the sandbox period, the relaxations provided will expire and the entity must exit the RS.

·      In case an extension is required, the entity should apply to the RBI at least 1 month before the expiration thereof extended period.

·      The entity may also exit from the RS by informing the RBI, 1 month in advance.

 ·      At the end of the testing period, relaxations provided on regulatory requirements shall expire.

·      Upon completion of testing, SEBI shall decide whether to permit the innovation to be introduced.

·      The applicant may request for an extension period

·      The applicant may exit the sandbox on its own by giving a prior notice to SEBI.

 ·      Applicant may request IRDAI for extension for a maximum of 6 months

·      Applicant shall submit a report within 15 days of completion of testing period on how the proposal met the stated objectives, based on which the project may be launched under the extant regulatory framework
Revocation of the approval IFSCA may revoke the approval at any time before the end of the testing period, if the applicant:

·   fails to carry out risk mitigants.

·   Submits false information or conceals material facts in the application

·   Contravenes any applicable law

·   Suffers a loss of reputation

·   Undergoes into liquidation

·   Carries on business in a manner detrimental to users or the public

·   Fails to   address any   defects in the   project

·   Fails to implement directions given by IFSCA

 The testing will be discontinued any time at the discretion of the RBI:

·   if the entity does not achieve its intended purpose

·   if the entity is unable to comply with the relevant regulatory requirements and other conditions

·   if the entity has not acted in the best interest of consumers

 SEBI may revoke the approval at any time before the end of the testing period, if the applicant:

·   fails to carry out risk mitigants

·   Submits false information or conceals material facts in the application

·   Contravenes any applicable law

·   Suffers a loss of reputation

·   Undergoes into liquidation

·   Carries on business in a manner detrimental to users or the public

·   Fails to   address any   defects in the   project

·   Fails to implement directions given by IFSCA

 The Chairperson of the IRDAI may revoke the permission so granted at any time, if it is of the view that the

activities carried out are not meeting the prescribed conditions/ are in violation of the provisions of applicable laws.

 

Conclusion

The IFSC RS framework seems to be drafted on lines of the RS framework issued by the SEBI. The only differentiating factor is the inclusion of all kinds of applicants operating for various purposes. Each of the frameworks discussed above has their peculiarities, and hence, the suitability to one’s design of business may vary. None of the RSs other than the ones introduced by IRDAI have been able to reap any concrete results lately. However, with the growing acceptance of technology, it is only a matter of time before we see various kinds of innovations in the way we transact every day.

 

[1] https://ifsca.gov.in/Viewer/Index/99

[2] https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=938

[3] https://www.sebi.gov.in/legal/circulars/jun-2020/framework-for-regulatory-sandbox_46778.html

 

[4] https://www.irdai.gov.in/ADMINCMS/cms/frmGeneral_NoYearLayout.aspx?page=PageNo3886

[5] After the introduction of the framework in August 2019, only 1 cohort has been announced i.e. in November 2019 themed ‘Retail Payments’ (https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=48550)

[6] After introduction of Insurance Regulatory and Development Authority of India (Regulatory Sandbox) Regulations, 2019 in July 2019, 2 cohorts have been introduced:

[7] Definition of startups- https://www.startupindia.gov.in/content/dam/invest-india/Templates/public/198117.pdf

[8]List of FATF compliant jurisdictions- https://www.fatf-gafi.org/countries/

[9] Refer- https://vinodkothari.com/2019/04/safe-in-sandbox-india-provides-cocoon-to-fintech-start-ups/

 

Other related write-ups:

Safe in sandbox: India provides cocoon to fintech start-ups

Fintech Framework: Regulatory responses to financial innovation