Fintech
Fintech startups welcome RBI’s SRO framework
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To encourage self-regulation in the fintech sector, the Reserve Bank of India (RBI) has finalized a framework for self-regulatory organizations (SROs) in the sector, incorporating stakeholder feedback into the draft rules released on January 15, 2024.
The framework recognizes the rapid innovation and growth in the fintech landscape and the need for a balanced regulatory approach that promotes development and consumer protection. With the introduction of SROs, the RBI aims to promote a culture of self-governance among fintech entities, ensuring that they adhere to high standards of conduct, transparency and accountability. “We applaud the RBI’s initiative to create a structured and self-regulatory framework for the fintech sector. This move will not only enhance the credibility and sustainability of our industry but will also ensure that customer protection, data privacy and security IT have top priority,” said Harshvardhan Lunia, chairman of the Fintech Convergence Council (FCC) and founder and CEO of Lendingkart.
Upholding integrity, fairness and responsiveness and complying with all relevant laws and regulations is critical to the fintech sector. “We are committed to embedding these principles into our operations and contributing to the development of a robust and trusted fintech ecosystem. CASHe is excited by the potential of this framework and eagerly anticipates improved standards and practices within the fintech industry, which will ultimately will foster a safer and more reliable financial environment for all stakeholders,” said Yashoraj Tyagi, CEO of CASHe.
SROs will have the critical responsibility for establishing guidelines and standard operating procedures that promote a culture of ethical conduct and innovation. “We welcome the RBI’s initiative to set up self-regulatory organizations (SROs) for the fintch sector. This forward-thinking approach will play a crucial role in setting industry standards for operations, ethics and business practices, ensuring that all fintech entities operate within a framework of integrity and accountability. This is especially significant for small and early-stage startups, who will benefit from clear guidance and a structured path towards sustainable growth and ethical operations,” said Sundeep Mohindru, promoter and director of M1xchange.
It is worth noting that the RBI recognizes the critical role played by fintechs within the country’s broader economic ecosystem and recognizes that not all players can be directly regulated by the authorities. Raja Debnath, MD, Veefin Solutions Limited, said, “SROs will be an invaluable asset in this context, regulating the community without hindering innovation. Furthermore, by acting as a bridge between the fintech sector and the RBI, the SRO will assist bearers of interests with industry-specific insights and better address regulatory concerns, promoting cooperation and overall industry development.”
Sharing a similar sentiment, Anand Kumar Bajaj, Founder, MD & CEO, PayNearby, said, “Promoting a development-oriented approach and inclusive governance, the SRO initiative aligns perfectly with our mission to democratize financial services and digital and empower local retailers across the world.”
Startups are confident that these industry-led SROs will create a more robust and reliable fintech ecosystem, benefiting all stakeholders.