On August 28, 2024, the Reserve Bank of India (RBI) officially recognized the Fintech Association for Consumer Empowerment (FACE) as a Self-Regulatory Organisation in the FinTech Sector (SRO-FT). This decision marks a significant step in the regulation and development of India’s fintech industry.
Background and Framework
In May 2024, the RBI introduced the final framework for establishing SROs within the fintech sector. The purpose of these organizations is to ensure that fintech entities operate with integrity, credibility, and in alignment with regulatory priorities. This framework is designed to promote the healthy and sustainable development of the fintech industry while facilitating effective communication between industry players and the central bank.
Recognition Process
The RBI received three applications for recognition as SRO-FT. Each application was rigorously evaluated according to the requirements set forth in the framework.
- Approved Application: FACE was granted recognition as an SRO-FT.
- Returned Application: One application was returned with a requirement for resubmission after meeting certain criteria.
- Under Examination: The third application is still under review.
Role and Responsibilities of SRO-FT
The SRO-FT is expected to operate with objectivity, credibility, and responsibility. Its responsibilities include:
- Facilitating Communication: Acting as a liaison between fintech companies and the RBI.
- Advocacy and Compliance: Promoting necessary changes in regulations and encouraging a culture of compliance among its members.
- Regulatory Alignment: Ensuring that members align with regulatory priorities and standards.
Recent Developments
On September 6, 2023, RBI Governor Shaktikanta Das emphasized the importance of fintechs establishing SROs within the year. The move to recognize FACE as an SRO-FT aligns with this directive and supports the RBI’s broader goals for the sector.