The Reserve Bank of India (RBI) is planning to issue a framework for the recognition of SROs (Self-Regulatory Organisations ) for regulated entities (REs), RBI Governor Shaktikanta Das said on October 6 announcing the monetary policy decision.
"Self-Regulatory Organisations (SROs) can play an important role in strengthening compliance culture among their members and also provide a consultative platform with the Reserve Bank for policy making," said Das.
Das further added that it has been decided to issue a draft omnibus framework for recognising SROs for various categories of Regulated Entities (REs) of the central bank for stakeholder comments.
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"Additional sector-specific conditions may also be prescribed at the time of calling for applications," he added.
An SRO is a non-governmental organisation that sets and enforces rules and standards relating to the conduct of member entities in the industry, with the aim of protecting the customer and promoting ethical and professional standards. The SRO is expected to resolve disputes among its members internally through mutually accepted processes to ensure that members operate in a disciplined environment and even accept penal actions by the SRO. An ideal SRO would function beyond the narrow self-interests of the industry and address larger concerns, such as protecting customers, furthering training and education and strive for development of members, the industry and the ecosystem as a whole.
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