On 30 May, 2024, the Reserve Bank of India (RBI) published a new self-regulatory framework for the Fintech sector (titled ‘Framework for Self-Regulatory Organisation(s) in the FinTech Sector’) which allows for entities classified as ‘Fintechs’ to set up, and be a part, of a self-regulatory organisations (SROs).1 The RBI views these SROs as mechanisms for greater regulatory compliances and standardization across the sector. The publication of this framework also divulges key aspects of the RBI’s perspective on technological innovation in the financial space and expectations from regulators on appropriate governance standards. Crucially, it also acknowledges the complex challenges involved in creating new direct regulations to bind different kinds of Fintech entities which are expected to proliferate within Digital India over the next decade.
The following primer elaborates on key aspects of the RBI’s framework, which may also inform self-regulation standards more broadly within India. At the outset, it should be noted that framework is distinct from the ‘Omnibus Framework for recognising SROs for Regulated Entities (REs)’ which was notified by the by Department of Regulation, RBI in March, 2024,2 although some commonalities between the two frameworks remain.
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