MUMBAI: The RBI, in its draft framework for
self-regulatory organisations
(SROs) among the entities that it regulates, has said that these bodies must foster consumer protection, fair competition, transparency and innovation. The framework provides for
RBI
to extend a letter of recognition to entities that fulfil the criteria for SROs.
RBI has said that any entity seeking to become an
SRO
must have sufficient authority, derived from membership agreements, to set ethical, professional and governance standards and enforce these standards on the members. "It should have strong governance mechanisms, including a focus on independent board, transparency, and adherence to well-defined processes," RBI said. The SRO must also have surveillance methods for effective monitoring of the sector.
The guidelines announced by RBI come close on the heels of the central bank asking
digital lenders
to come up with an SRO within a year.
According to
Jatinder Handoo
, CEO, Digital Lenders Association of India, RBI has wired a framework around critical aspects.
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