RBI to release fintech SRO framework before the end of month, says governor Das

Earlier, following the October 2023 MPC meeting, Das said that RBI is planning to issue a framework for SROs for regulated entities (REs).

The Reserve Bank of India (RBI) will release the framework for a self-regulatory organisation (SRO) for fintechs before the end of the month, RBI Governor Shaktikanta Das on April 5.

“We propose to release the framework before (the end of) April 2024. We would want one SRO related to fintech to be operational in the 2024 Global Fintech Festival,” Das said at the customary post-MPC press conference.

Deputy governor T Rabi Sankar said the central bank had received the comments from stakeholders. “We will be out with the framework,” Sankar said.

Also read: Fintechs to get self-regulatory organisation in 3-6 months, say industry players

An SRO is a non-governmental organisation that sets monitoring standards for industry players and works as a bridge between the industry and the regulator. For example, MFin is an SRO for the microfinance sector.

The MPC left the key repo rate unchanged at 6.5 percent for the seventh time in a row, in line with the market expectations, with its focus firmly on bringing inflation down. It also left the stance unchanged as withdrawal of accommodation. The decisions were takes with a 5:1 majority.

Das on September 6 urged fintechs to establish an SRO over the next year. "I would like to use this opportunity to urge and encourage the fintechs to establish a Self-Regulatory Organisation themselves," Das said while speaking at Global Fintech Fest (GFF) 2023 in Mumbai.

“Digital innovations, at times, have also led to cyber-risk and data security-related issues. Illustratively, the mushrooming of illegal loan apps, many of which had their origins in foreign jurisdictions, has led to serious concerns about breaches of data privacy, unethical business conduct, the levying of exorbitant interest rates, and harsh recovery practices.”

After the October 2023 MPC meeting, Das said RBI was planning to issue a framework for SROs for regulated entities (REs).