The expectation is that self-regulatory organizations would assist in creating industry best practices and standards and make sure that members follow them.
FIDC Gains SRO Status
The Finance Industry Development Council (FIDC) was awarded “self-regulatory organization” status by the Reserve Bank of India (RBI) on Friday in an effort to promote regulatory compliance in the non-banking lending industry.
The role of self-regulatory organizations (SROs) is to assist in the development of industry best practices and standards and to make sure that members follow them. They should also work with the RBI to improve adherence to rules and identify warning signs, among other things.
RBI Approves SRO Applications
Moneycontrol had earlier in August announced that FIDC had obtained the central bank’s in-principle approval for an SRO license.
In the financial technology (fintech) industry, the RBI awarded SRO designation to the Fintech Association For Consumer Empowerment last year, along with a framework for recognizing SROs in the financial markets domain.
The central bank said on Friday that it had received three applications, including the FIDC, to be recognized as self-regulatory organizations in the NBFC sector.
FIDC Represents Top NBFCs
The RBI-registered non-banking financial businesses (NBFCs) are represented by the FIDC. According to the organization’s website, almost all of the top NBFCs in the nation are members.
Without identifying them, the RBI said, “The other two applications were not considered as they were incomplete as of the final date of filing of application.”