RBI encourages self-regulation of the fintech industry through new framework

The Reserve Bank of India (RBI) has finalized the Framework for the Recognition of Self-Regulatory Organizations for the Fintech Sector (SRO-FT) after inviting comments on the draft framework in January this year.

The RBI will initiate the process of initiating the recognition of SROs that meet the requirements of the SRO-FT framework. Self-government organizations seeking recognition can apply for recognition and information about the eligible organizations will be published on the RBI website.

The move aims to encourage self-regulation of the fintech sector in India and provide a regulatory infrastructure to manage new technologies entering the industry and newcomers in the space.

In 2023, the RBI announced a credit technology program that aims to increase credit transactions on a public technology platform and create a digital payments infrastructure.

Bharat Dhawan, managing partner of Mazars India, commented on the framework: “This forward-looking approach will not only improve regulatory compliance and ethical standards, but also strengthen market integrity and transparency. As a consultancy, we are confident that these industry-led SROs will create a more robust and trusted fintech ecosystem, to the benefit of all stakeholders.”

Yashoraj Tyagi, CEO of CASHe, added: “This initiative is a significant step towards ensuring customer protection, data privacy, cyber security, grievance redressal, internal governance and overall integrity of the financial system in our rapidly evolving industry.”