visimoney
In a move to regulate the fintech industry, the Reserve Bank of India (RBI) has released a draft framework for fintechs to create self-regulatory organizations (SRO-FT) that will monitor fintech apps and ensure compliance with industry standards and relevant laws and regulations. The SRO-FT will act as a conduit between fintech companies and the RBI, playing an important role in serving consumer interests. The rise of fintech apps has revolutionized the way people manage their finances, providing convenience and accessibility. However, it has also brought about an increase in crimes like data theft and threats to cybersecurity and customer protection. The illegal practices of digital lending apps, for example, have led to predatory actions that have driven borrowers to extreme measures, attracting the attention of the RBI. The establishment of an SRO for fintech apps aims to address these concerns and protect consumers.
The SRO-FT will have several key functions:
- Monitor and enforce compliance: The SRO-FT will ensure that fintech apps adhere to industry standards and comply with relevant laws and regulations. This will help protect consumers from predatory practices and ensure the safety of their personal and financial data.
- Set industry standards: The SRO-FT will establish and maintain industry standards for fintech apps, creating a framework that promotes transparency, fairness, and ethical practices. This will help foster trust between consumers and fintech companies.
- Resolve consumer complaints: The SRO-FT will provide a platform for consumers to raise complaints and seek resolution. It will have the authority to mediate disputes and take appropriate actions against non-compliant fintech apps.
- Advise the regulator: As a liaison between fintech companies and the RBI, the SRO-FT will provide feedback and recommendations to the regulator on relevant policies and regulations. This will help shape the regulatory framework for the fintech industry.
The establishment of an SRO for fintech apps is a significant development in the regulation of the fintech industry in India. It aims to address concerns related to consumer protection, data security, and ethical practices. By creating a framework for self-regulation, the RBI is taking proactive steps to ensure the growth and sustainability of the fintech sector while safeguarding the interests of consumers.
