RBI drafts guidelines for Fintech SROs, taking self-regulation forward.

The Reserve Bank of India (RBI) has published a draft framework for the recognition of self-regulatory organizations (SROs) in the fintech sector. The framework outlines the characteristics of an SRO and sets out the functions and governance standards that such organizations should adhere to. The RBI highlights the importance of striking a balance between facilitating innovation in the industry and implementing regulatory measures to protect consumers and manage risk. The draft framework emphasizes that self-regulation is the preferred approach for achieving this balance. The RBI proposes that the strength of an SRO should come from its membership, ensuring that it represents the fintech sector as a whole. The SRO is expected to set baseline standards, rules of conduct, and a common framework for its members. The framework also stresses that the SRO should actively contribute to the growth and development of the industry by providing specialized knowledge and expertise and offering guidance and training programs. Minimum eligibility criteria for membership will also be prescribed by the SRO. Overall, the RBI’s draft framework aims to establish a self-regulatory system that promotes innovation, protects consumers, and fosters the growth of the fintech sector in India.