RBI Gives SRO Recognition to Fintech Association for Consumer Empowerment

Reserve Bank of India (RBI) governor Shaktikanta Das confirmed on August 28 that it has granted permission to the Fintech Association for Consumer Empowerment (FACE) to form the self-regulatory organisation (SRO) for the fintech sector. 

“Of the three industry body entities that have applied for recognition as SROs, the Reserve Bank has granted to one applicant,” Das said at the Global Fintech Fest in Mumbai. 

He further confirmed that two out of the three applications are in the queue. One application has been returned with a provision for resubmission after meeting certain requirements. The third application is under examination. 

In May 2024, the central bank released the final framework for establishing SROs in the fintech industry. The central bank stated in their release that the SRO-FT (fintech) aims to work "objectively, with credibility and responsibility" under the oversight of the central bank and will work towards "healthy and sustainable development" of the sector. 

An SRO-FT will include members from fintech companies regulated by the RBI, such as non-banking financial companies that are account aggregators (NBFC-AA) and peer-to-peer (P2P) lending platforms, but it will not include banks. 

“Self-regulatory organisations (SROs) comprising industry participants and having a good understanding of the sectors would be in a position to give appropriate suggestions to regulators on issues of regulations that are both practical and effective. These SROs will understand the requirements and the evolving technologies,” added Das. 

Das also proposed five policy priorities with regards to the future of the fintech sector. This includes consumer protection and cybersecurity, digital financial inclusion, digital public infrastructure (DPIs), sustainable finance and global integration and cooperation. 

Das was speaking at the Global Fintech Summit that is being conducted in Mumbai from August 28 to 30, 2024. It is an annual fintech conference organised by the Payments Council of India (PCI), the National Payments Corporation of India (NPCI) and the Fintech Convergence Council (FCC).