Source- This post on RBI Self-Regulatory Organization Framework for FinTech Firms has been created based on the article “RBI specifies framework for SRO for FinTech firms” published in “The Hindu” on 31 May 2024.
Why in News?
Recently, The Reserve Bank of India (RBI) has introduced a new framework for the recognition of a Self-Regulatory Organization (SRO) for fintech Firms.
About RBI Self-Regulatory Organization Framework for FinTech Firms
1. The Reserve Bank of India (RBI) has introduced a new framework for the recognition of a Self-Regulatory Organization (SRO) tailored specifically for the FinTech sector.
2. Aim: This initiative is aimed at enhancing self-governance and compliance among FinTech companies.
3. Organizational Requirements:
a) Applicants for the SRO-FT must be established as not-for-profit entities.
b) Their shareholding structure should be diversified, with no single entity holding 10% or more of the paid-up share capital.
4. Operational Guidelines
a) It is expected to operate with objectivity, credibility, and responsibility, under the oversight of the RBI.
b) It is tasked with promoting the healthy and sustainable development of the FinTech sector.
This may include outlining a phased approach to regulatory and supervisory compliance where necessary.
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