RBI releases draft rules for Fintech Self Regulatory Organisations
The Reserve Bank of India (RBI) has released a draft framework for self-regulatory organisations (SROs) in the fintech industry. The RBI is seeking comments from the public and stakeholders before finalising the rules. The SRO-FT should be representative of the fintech sector and accepted as the key body for setting market standards. It should actively contribute to the growth and evolution of the industry and operate independently to ensure unbiased decision-making. The SRO-FT should be seen as a legitimate arbiter of disputes and should motivate its members to align with regulatory priorities. The applicant for SRO-FT should be a not-for-profit company with sufficient net worth and a robust IT infrastructure. Membership should be voluntary and encompass fintechs of all sizes, stages, and activities. The SRO-FT should guide member conduct, ensure adherence to standards and regulations, and address grievances and conflicts of interest. A transparent and fair dispute resolution mechanism should be in place, and the SRO-FT should collect and disseminate relevant data about members’ activities. The draft rules also outline requirements for governance, including guidelines for transparency, accountability, integrity, and fairness. The RBI has asked for industry feedback on questions such as the number of SROs required and whether the SRO-FT should comprise regulated and unregulated members. Feedback is due by the end of February. The CEO of the Digital Lenders Association of India, Jatinder Handoo, commended the comprehensive framework and its emphasis on consensus, cooperation, and the diverse nature of the fintech sector.