KUALA LUMPUR (July 1): Bank Negara Malaysia (BNM) has opened applications for the latest Green Lane regulatory sandbox. This programme allows eligible financial institutions to test new fintech solutions more quickly, especially those that do not fully fit current regulations.
Introduced in 2024, the Green Lane is a faster version of BNM's Standard Sandbox. Once approved through a one-time assessment, institutions can use a simplified registration process each time they want to test a new financial solution.
Applications are open from July 1 to 31 for banks, development financial institutions, insurers, takaful operators and money services businesses with strong risk management, compliance and governance records, the central bank said on Wednesday.
BNM aims to decide on complete Green Lane applications within 30 working days. Once admitted, institutions must register each new solution at least 15 working days before the planned testing date.
Testing is generally limited to 20,000 customers for each solution over a period of up to 12 months, although BNM may impose a lower limit for higher-risk products.
Applicants must submit a list of proposed solutions, including details of the business model, target customers, regulatory obstacles and planned testing dates.
They must also assess the maximum combined financial losses that could arise from the proposed tests, supported by confirmation from the chief executive officer and chief risk officer that the estimate is conservative and has minimal impact on the institution’s financial position.
Green Lane participants are required to identify and manage product-specific risks, comply with rules on consumer protection and anti-money laundering, and compensate customers for direct financial losses caused by technical problems or failures of the tested solution.
The framework does not allow institutions to bypass existing laws or obtain exemptions from legislation administered by BNM or other authorities.
Fintech companies are not eligible to apply directly for the Green Lane, but may collaborate with participating financial institutions. They may also apply through the Standard Sandbox track.
Applications must be submitted to BNM by email together with the required supporting documents.