Updated January 15th, 2024 at 17:02 IST
RBI proposes draft framework for fintech self-regulatory body
The proposed SRO aims to address the sector's evolving needs and challenges, aligning with RBI Governor Shaktikanta Das' call for such an entity in September.
RBI framework for fintech: The Reserve Bank of India (RBI) has released a draft framework, urging Indian fintech firms to establish a self-regulatory organisation (SRO) to ensure compliance with statutory and regulatory requirements. This move comes as the fintech industry experiences rapid growth, fueled by increased demand for digital payments and borrowings.
The proposed SRO aims to enhance governance standards and address the sector's evolving needs and challenges, aligning with RBI Governor Shaktikanta Das' call for such an entity in September. The central bank emphasises the importance of striking a balance between fostering industry innovation and meeting regulatory priorities to protect consumers and manage risks effectively.
According to the draft norms, the SRO's responsibilities include ensuring adherence to industry standards and establishing transparent communication channels with the RBI. Additionally, the organisation will collaborate with the RBI in developing and updating taxonomy for fintech firms, performing tasks assigned to it, and providing information as directed by the central bank.
The RBI retains the authority to inspect the books of the SRO or arrange for their audit. The SRO's board is expected to establish a framework for the continuous monitoring of the 'fit and proper' status of its directors.
The central bank is seeking feedback on the draft framework until the end of February, following which a final framework will be issued to guide the establishment and operation of the proposed fintech SRO.
(With PTI inputs.)
Published January 15th, 2024 at 17:02 IST