MUMBAI: On Wednesday, Governor Shaktikanta Das of the RBI requested that the fintech industry establish a self-regulatory organization (SRO) within a year to alleviate the central bank's workload and provide the industry with a voice.
For some time, the central bank has been encouraging fintech companies to self-regulate. M K Jain, the deputy governor at the time, had urged the industry to establish an SRO in March. The fact that many of these entities are not financial institutions presents RBI with a regulatory challenge.
At the GFF 2023 conference, Das stated, "I do hope that by next year, when we meet for the 2024 edition of the Global Fintech Fest (GFF), I see an SRO formed... or we can launch the SRO at next year's event." He went on to say that one year is sufficient. I'm putting next year as an upper limit, but I'm confident that if we work together, we can complete this even more quickly."
"They (fintechs) need to evolve industry best practices, privacy and data protection norms in sync with the laws of the land," Das stated. "Set standards to avoid misselling, promote ethical business practices, and transparency of pricing."
Additionally, the governor of the RBI introduced three NPCI digital products: UPI Tap & Pay, UPI Lite X, and Credit Line The first product aims to make it easier to get credit and to make it easier to get pre-approved credit lines through UPI. The second product makes it easier for people with NFC-capable smartphones to pay offline, making it more accessible in areas with limited connectivity. NFC-enabled QR code payments are introduced in the third release.
Das went on to say that the RBI was leading the way in creating a "public tech platform for frictionless credit," which would be a part of the public financial infrastructure.