. the recent developments in fintech have given a fresh impetus to financial inclusion process in the country. taking cognisance of exponential growth of digitisation and online commerce in india, policy efforts have been directed in recent years to put in place a state of the art national payments infrastructure and technology platform. the reserve bank is continuously aligning its regulatory and supervisory framework so that the evolution of fintech can be leveraged to widen and ease the financial access by the excluded population. in view of the growing significance of fintech innovations and their interface with the financial sector as well as financial sector entities, the reseve bank is strengthening its surveillance framework and has also issued draft guidelines on “ enabling framework for regulatory sandbox ” for obtaining the comments of stakeholders. mr. carstens ’ s talk today will surely give us relevant insights in this direction. let me now invite mr. carstens to deliver his lecture. 2 / 2 bis central bankers'speeches

, it would be good to have a quick look at the resolution frameworks we had in place before. the normal principle for restructuring is that an account should be downgraded if any amount is forborne. the reserve bank put in place, in august 2001, the corporate debt restructuring ( cdr ) mechanism for restructuring of debt without the need for an asset quality downgrade if the restructuring plan met certain conditions. the cdr mechanism worked well initially. in later years, its asset quality forbearance was used more as a tool for avoiding recognition of nonperformance of stressed assets and less for their effective resolution. therefore, in may 2013, we announced the decision to withdraw the forbearance on asset classification effective april 1, 2015. however, in the wake of the mounting npas, the reserve bank allowed asset classification benefits for certain types of restructuring schemes. these included the strategic debt restructuring ( sdr ), flexible structuring of project loans and the scheme for sustainable structuring of stressed assets ( s4a ). thus, while the principle that a restructuring would call for downgrade of the asset was in place, a window of exception was opened, provided the contours of restructuring met certain conditions. 9. it has been our view that the restructuring schemes were required at a time when we did not have an effective bankruptcy law in place. the schemes essentially created a framework for resolution that should normally happen under the aegis of an insolvency and bankruptcy law. the focal points of the schemes were deep restructuring of stressed assets, change of ownership / management of stressed borrowers, optimal structuring of credit facilities, and haircuts wherever the exposures were economically unviable. 10. in 2016, the insolvency and bankruptcy code, 2016 ( ibc ), which is a comprehensive bankruptcy code, was enacted and notified. the code envisages timely resolution of borrower defaults through collective decision making by the creditors. the code is both 2 / 9 bis central bankers'speeches process - oriented and time - oriented. it is - process - oriented, in that it lays down, in detail, the various steps that need to be followed once a borrower is admitted for insolvency ; and it is timeoriented because it specifies strict timelines for insolvency resolution, failing which the borrower would have to be taken into liquidation. 11. the general approach of bankers to stress in large