Digital Lending Giants Rally To Boost Fintech Participation In Self-Regulatory Organisations

ENA Sectors 2024-01-24 14:11:11 New Delhi, Jan 24 (KNN) In response to the Reserve Bank of India's (RBI) recent draft framework for self-regulatory organizations for fintechs (SRO-FTs), major digital lending associations are actively working to incentivise membership and encourage participation among companies in the country. Jatinder Handoo, CEO of the Digital Lenders Association of India (DLAI), highlighted the major incentives for companies to join an SRO-FT, including reputation enhancement, mentorship for startups, capacity building, access to resources like innovation offices, clarity on regulatory requirements, training programs through events and webinars, legal assistance, and the opportunity to be part of a unified sectorial voice on various platforms. While the RBI emphasised the need for incentives for membership in the fintech sector, it also clarified that SRO-FT membership would remain voluntary. External stakeholders such as investors and rating agencies are expected to play a role in encouraging participation. Sugandh Saxena, CEO of the Fintech Association for Consumer Empowerment (FACE), highlighted the long-term impact of SROs, stating that companies may find it challenging to justify non-participation once SROs take root. However, setting up a robust SRO-FT is a cost-intensive process, involving infrastructure establishment, talent training, and daily operational activities. To fund these operations, associations plan to charge a reasonable fee based on the annual loan disbursement of fintech companies. Both DLAI and FACE stressed the importance of ensuring the representative nature of SRO-FTs, as outlined in the RBI's draft framework. The diverse functions performed by fintech companies, including lending, payment, data aggregation, software/IT, compliances, SaaS, and scoring, necessitate a careful examination to address plurality and risks effectively. The associations also emphasised the need for diversity within organisations, including loan service providers (LSPs) and technology service providers (TSPs), to ensure a consensus-based approach on critical aspects within the evolving fintech sector. Handoo concluded that an initial corpus of Rs 5 crore would be crucial for the financial stability and sustainability of SRO-FTs over time. (KNN Bureau) 36409 https://knnindia.co.in/news/newsdetails/sectors/digital-lending-giants-rally-to-boost-fintech-participation-in-self-regulatory-organisations 2024-01-24 14:11:11 knnindia.co.in Digital Lending Giants Rally To Boost Fintech Participation In Self-Regulatory Organisations