A Self-Regulatory Organisation for Fintechs (SRO-FT), as has been proposed by the RBI, would bring standardisation and help in distinguishing critical gamers from the remainder of the lot, stated Jatinder Handoo, CEO, Digital Lenders Association of India (DLAI).
“At present , the Indian fintech industry is diverse in nature, hence the priorities and their representations are also divergent,” Mr. Handoo stated in an e-mail interview.
“For members of an SRO-FT, the single biggest benefit would be a credible platform to take forward genuine, common voice of fintech players to appropriate offices and contribute positively in the regulatory and policy making dialogue which affects the entire sector,” he stated.
“Additionally, it will bring a common minimum standardisation in processes like addressing customer grievances or common Leading Service Providers (LSP) agreements and forging sectoral partnerships,” he added.
“SRO-FT will act as a repository for sectoral data and it will release credible data backed reports regularly, it will bring more transparency and openness to the system and hence, will also reinforce investors’ and policy makers’ confidence and interest,” he additional stated.
This comes amid a excessive decibel marketing campaign by a piece of the fintech trade contending that the Reserve Bank of India (RBI) as regulator is ‘stifling innovation’ by stressing on compliances. The RBI had just lately barred Paytm Payments Bank Ltd. from accepting any additional deposits and ordering the closure of its pockets, nodal and different accounts.
The RBI, whose major duties embody preserving monetary stability by making certain that regulated entities (REs) observe the prescribed laws, has already set into movement steps for the institution of a framework for a self-regulatory organisation (SRO) for fintech firms with an goal to set requirements for the trade, support in oversight and enforcement, and supply grievance redressal and dispute decision.
The course of, which is at a suggestions stage at the moment, is predicted to be formalised shortly.
“This approach could empower the sector to demonstrate its commitment to responsible conduct and innovation even in the absence of formal regulation,” the RBI had stated in a launch in January. “Through collaboration, the industry could collectively identify and address challenges, foster an environment where innovation flourishes, and guide a shared commitment to ethical business practices,” it added.
Self-regulation would additionally supply the benefit of adaptability to speedy technological developments and evolving market dynamics, the RBI had stated.
DLAI, which complies with the RBI’s omnibus framework necessities, plans to use for an SRO licence as and when it will be notified. Registered as an organization in 2016, DLAI is fostering a conducive setting for ease of doing enterprise, supporting accountable market conduct, selling market stability, making certain consumer safety and aligning with coverage priorities of the Government and is working to strengthen the Indian financial system by way of fintech, Mr. Handoo asserted.
The CEO stated DLAI had been working onerous to put down the inspiration for a robust SRO.
“Aspects such as governance, code of conduct, customer grievance redressal systems, capacity building workshops are some of the things we have focused on during the last few months,” he stated.
“We believe digital financial services are empowering and through DLAI , I am looking forward to playing the role of a catalyst,” he added.
He stated India’s gentle diplomacy involving the export of India stack was additionally serving to.
“DLAI as an Industry association, proactively engages with representative industry bodies in geographies like Philippines, EU , MENA on areas like common best practices, research and innovation and investment opportunities. Many have evinced interest in understanding the applicability of India’s Digital Public Infrastructure in financial inclusion in these countries,” Mr. Handoo added.
