RBI Governor Urges Fintech Sector To Establish Self-Regulatory Body
The Reserve Bank of India Governor, Shaktikanta Das, on Wednesday urged financial technology companies to take the initiative in creating a self-regulatory organisation (SRO) to address the industry's specific needs and challenges.
Speaking at the Global FinTech Fest 2023 (GFF), Governor Das emphasised the importance of self-regulation in a rapidly growing industry fueled by increasing demand for digital payments and borrowing services.
In his keynote address, Governor Das said, “I would like to use this opportunity to urge and encourage the fintechs to establish a self-regulatory organisation or SRO themselves. From the Reserve Bank, we are willing to engage with you. It (SRO) will give you (fintechs) an opportunity to voice your requirements more frequently to the SRO. The other advantage is that all the aspects of regulation will not be burdened on the Reserve Bank.”
Governor Das expressed his optimism that the fintech industry would either have formed or be on the cusp of launching an SRO by the time of the next Global FinTech Fest event in 2024. He added, “I am saying next year as an outer limit, but I am sure if we work together, we can do this even faster.”
This proposed self-regulatory body could play a pivotal role in facilitating collaboration among fintech companies, regulators, and stakeholders while simultaneously establishing essential guardrails for the industry.
T Rabi Sankar, Deputy Governor of the Reserve Bank of India, highlighted the importance of such an organisation. He said, “By proactively addressing issues like market integrity, conduct, data privacy, cybersecurity, and risk management, SROs help build trust among consumers, investors, and regulators.”
The idea of fintech SROs aligns with a global trend where numerous countries and regions are either implementing or considering self-regulatory bodies to oversee their rapidly evolving fintech sectors. Such initiatives are seen as a way to ensure regulatory effectiveness, enhance industry collaboration, and bolster consumer trust in the burgeoning fintech landscape.
