FCC members float new entity to compete for SRO-Fintech licence

Fintechs have emerged as the next big value creator for investors

A group of members from the Fintech Convergence Council (FCC), a dedicated fintech committee under the Internet and Mobile Association of India (IAMAI), has floated a new entity to secure the licence for the Reserve Bank of India’s (RBI) self-regulatory organisation (SRO).

The SRO- FT Development Foundation was registered in August and is working on securing a mandate from the RBI, sources told Moneycontrol.

“They are like an offshoot of FCC but separate from them,” one of the sources said. “They may take up broader set of verticals besides lending and payments like wealthtech, investment platforms, insurtech, regtech, open banking, B2B fintech, decentralised finance (DeFi), central bank digital currencies (CBDC) and Web3 etc,” the source added.

An SRO is a non-governmental organisation that acts as a bridge between industry players and regulators, setting standards for the conduct of entities operating in the country.

Also read: India's growing fintech industry and the case for self-regulation

FCC was among the three organisations which had applied for the RBI licence in 2024, of which Fintech Association for Consumer Empowerment (FACE) managed to get the mandate.

Since then, FCC and Digital Lenders Association of India (DLAI) have been in contact with the regulator for feedback and reapplication, as Moneycontrol has reported.

While FCC members floated a new organisation, DLAI recently rebranded itself as the Unified Fintech Forum (UFF) in response to the RBI’s feedback, the Business Standard reported.

Also read: FCC, DLAI taking required actions to qualify for RBI's fintech SRO license

The management team of the new entity includes Jitendra Gupta (founder, Jupiter), Sujith Narayanan (co-founder, Fi Money), Harshvardhan Lunia (founder, LendingKart), Chiranth Patil (co-founder, Riskcovry), Anurag Sinha (co-founder, Onecard) and Srikanth Rajagopalan (CEO, Perfios Account Aggregation Services).

Former RBI deputy governor NS Vishwanathan is expected to join the board. Veteran banker Dhananjaya Tambe and former SIDBI board chairman Mohammed Mustafa may also be a part of the leadership team, sources said, while former Invest India - Head of FDI for APAC, Sai Sudha Chandrasekaran is set to lead the charge as the CEO.

The RBI on May 20, 2024 came up with a framework for SROs within the fintech industry to promote "healthy and sustainable development" under the central bank's oversight.

SROs should be free from influence and subscribe to regulatory expectations, the central bank said.

The SRO within the fintech industry (SRO-FT) is expected to play a pivotal role in aligning its members with regulatory priorities. This involves advocating for necessary changes and promoting an alliance and culture of compacting as a crucial conduit between industry players and the RBI.

Currently, FACE has a fast-growing membership of over 165 companies across fintech domains, closely working with regulatory and government authorities, members, and other stakeholders to create a responsible ecosystem.

The SRO-FT has expanded its scope beyond lending to include participants from associated domains such as account aggregator non-banking financial companies (AA-NBFCs), regulatory technology (regtech) firms, peer-to-peer (P2P) NBFCs, and others.

Besides larger fintech SRO, the RBI has also introduced a framework for the recognition of a SRO for the Account Aggregator (AA) ecosystem, to enhance transparency and regulated exchange of financial data across India’s digital financial infrastructure.

The RBI called applications for it on March 12 and has set a June 15 deadline for sending in responses.