RBI releases finalised framework for Indian fintech sector's self-regulatory body

The Reserve Bank of India has finalised the framework for recognising SROs for the fintech sector following feedback from stakeholders on its January 15 draft norms.

The self-regulatory organisation (SRO) would be industry-led, and will be responsible for establishing and enforcing regulatory standards, promoting ethical conduct, ensuring market integrity, resolving disputes, and fostering transparency and accountability among its members.

Fintechs should create a self-regulatory body to address their needs and challenges, the Reserve Bank of India Governor Shaktikanta Das had said in September. A draft framework was released in January.


RBI has asked this SRO to be one built on a 'representative' structure which would enable it to draw upon the collective expertise and experience of its members, resulting in development of standards that are pragmatic, adaptive, and widely accepted within the fintech community.

SROs have been asked to motivate its members to align with regulatory priorities and facilititate communication with the regulator, i.e., RBI.

No entity should hold up to 10 per cent or more of its paid-up share capital. This SRO could have fintechs domiciled outside India as its member, RBI said.

The guidelines emerge as India's fintech industry experiences rapid growth, driven by increasing demand for digital payments and loans, raising concerns about customer protection, data privacy, cybersecurity, and internal governance.

The applicant should have a minimum net worth of Rs 2 crore within a period of one year after recognition as an SRO-FT by RBI, or before commencement of such operations, it added.

Such an applicant should represent the fintech sector with membership across entities "of all size, stage and activities," with the board and key managers possessing professional competence and a reputation for fairness and integrity, RBI said.

The number of SRO-FTs to be recognised would depend on the number and nature of the applicants received, the RBI said, adding that it reserves the right to not grant recognition to any such application.

(With agency inputs)