RBI sets guidelines for self-regulation in fintech sector – Banking & Finance News

The Reserve Bank of India (RBI) has released its final guidelines for financial technology firms to establish a self-regulatory organization (SRO) in order to uphold regulatory standards and promote transparency in the sector. The SROs are expected to be development-oriented, representative, and fair arbiters of disputes.

RBI Governor Shaktikanta Das had previously suggested the creation of a self-regulatory body for fintechs to address their specific needs and challenges. After receiving feedback from industry bodies, the central bank has now finalized the guidelines for the SRO-FT, emphasizing the importance of credibility, objectivity, and responsibility in its operations.

The SRO-FT is expected to play a crucial role in setting baseline standards, enforcing codes of conduct, and monitoring compliance within the fintech sector. It should operate independently and be free from the influence of any single member or group of members to ensure unbiased decision-making.

Industry bodies have welcomed the new guidelines, with the Digital Lenders Association of India CEO Jatinder Handoo praising the recognition of various fintech businesses and the emphasis on supporting non-regulated entities. The Payments Council of India (PCI) has announced its intention to apply for the SRO, highlighting the importance of self-governance and adherence to industry standards.

Overall, the establishment of the SRO-FT is seen as a positive step towards fostering a culture of responsible conduct and innovation within the fintech industry, even in the absence of formal regulation. The guidelines aim to promote the healthy and sustainable growth of the sector while ensuring that all members align with regulatory priorities.