New Delhi, May 31 (KNN) The Reserve Bank of India (RBI) on Thursday released its final guidelines for the establishment of a self-regulatory organisation (SRO) to govern the financial technology (fintech) sector.

The central bank aims for this industry-led entity to enforce regulatory standards and promote transparency among fintech firms operating in India.

As per the guidelines issued, the SRO for fintechs (SRO-FT) should be a development-oriented body that serves as a true representative and legitimate arbiter within the sector.

"The SRO-FT should gain the legitimacy and credibility to not only frame baseline standards and codes of conduct, but also effectively monitor and enforce them," stated the RBI.

The move comes after RBI Governor Shaktikanta Das called for fintechs to create a self-regulatory body last September to address sector needs and challenges.

A draft guideline was released in January 2023, incorporating feedback from industry bodies.

The central bank has mandated that the SRO-FT must operate objectively and responsibly under RBI oversight.

It should strive for the healthy and sustainable development of the fintech sector while identifying a path towards phased regulatory compliance where necessary.

Crucially, the guidelines stipulate that the SRO-FT's membership should be truly representative of the fintech sector, including entities currently regulated by the RBI.

It must derive strength from this membership while operating independently from undue influence. No single entity should hold more than 10 per cent of the SRO's paid-up capital.

The establishment of the self-regulatory body aims to enable the fintech sector to demonstrate responsible conduct and foster innovation through self-governance mechanisms within an appropriate regulatory framework overseen by the central bank.

For further details, please visit the page https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=58000

(KNN Bureau)