Explanation – A Self-Regulatory Organization (SRO) in the FinTech sector is a non-governmental entity that establishes and enforces rules, standards, and guidelines for its member companies to ensure they operate ethically and responsibly. SROs are designed to oversee certain aspects of their members’ activities, promote best practices, and often provide a framework for compliance that aligns with national and international regulatory expectations. Unlike government bodies, SROs are typically industry-led, allowing for more flexibility and adaptability in response to rapid changes within the FinTech sector. To be recognized as an SRO-FT, the organization must be registered as a not-for-profit company under Section 8 of the Companies Act, 2013, and ensure that no single entity holds more than 10% of its paid-up share capital. SROs act as a bridge between the fintech industry and the RBI.

Source: AIR