India’s fintech ecosystem is witnessing exponential growth, but the regulatory infrastructure is still evolving to keep pace with digital innovation. To bridge this regulatory gap, the Reserve Bank of India (RBI) has proposed a bold institutional mechanism: Self-Regulating Organisations (SROs)—not merely as compliance facilitators but as strategic policy intermediaries in India’s dynamic fintech sector.

Under the RBI’s Fintech SRO Framework (2024), Self-Regulatory Organisations in India are expected to serve as repositories of market intelligence, trusted advocates for the fintech industry, and co-creators of regulatory frameworks. However, this role demands more than procedural participation—it requires data-backed, informed, and evidence-based policy advocacy.

Policy Engagement as a Core Mandate

Unlike traditional industry associations, fintech SROs in India shall operate under a regulatory structure that formally embeds their role in policy development. They are expected to track regulatory technology trends, collate sectoral insights, and support risk-based, proportional regulation. Notably, the RBI has clarified that SROs are not enforcement authorities. They may offer guidance and aggregate insights but shall not report on individual entities without informed consent.

This dual role of industry advocacy and regulatory collaboration should balance member representation and public interest. Its success depends on a rarely acknowledged fourth pillar: persuasion.

The Role of Persuasion in Policy Advocacy

Three values define a resilient SRO: collaboration, trust, and loyalty. Yet, persuasion is what enables these organisations to serve as genuine agents of regulatory innovation and policy development.

1. SROs should persuade members to rise above firm-specific interests and coalesce around sector-wide standards that enable both innovation and compliance.
2. They should persuade policymakers and financial regulators to adopt co-created solutions based on real-time, data-driven intelligence and inclusive dialogue.

A global study by the University of Cambridge Centre for Alternative Finance reinforces this approach. In developing markets like India, 80–90% of fintech associations identify regulatory advocacy and collaboration as their primary purpose. In contrast, associations in advanced economies focus more on member services due to already mature regulations. India, therefore, presents a rare opportunity where fintech regulatory frameworks are still being shaped, and fintech SROs must seize this moment with strategic foresight.

Toward Impact-Oriented Advocacy

To create a measurable regulatory impact, India’s fintech SROs should:

1. Leverage sector-wide datasets to build credible policy recommendations
2. Represent a diverse fintech landscape, from legacy NBFCs to emerging digital lenders and payments startups
3. Minimise conflicts of interest, especially with major platforms
4. Publish periodic impact assessment reports showcasing the real-world effect of their policy inputs

The objective is to transition from passive policy spectators to active participants in financial regulation, ensuring regulatory clarity and industry resilience.

Safeguarding Advocacy from Anti-Competitive Risk

In navigating their advocacy role, fintech SROs should exercise great caution to ensure that their code of conduct, as envisaged under the RBI’s SRO Frameworks, is not compromised or misapplied. The Omnibus Framework (March 2024) mandates that SROs maintain transparent, well-defined rules of conduct with appropriate consequences for non-adherence. However, in practice, SRO-facilitated discussions around pricing, operational benchmarks, or market strategy must be carefully ring-fenced to avoid any semblance of coordinated behaviour that could attract scrutiny under India’s Competition Act, 2002. As policy intermediaries, SROs should encourage standard-setting for ethical and consumer-centric practices, not market allocation or pricing agreements. Advocacy platforms must not become arenas for anti-competitive coordination. To this end, every advocacy initiative should be preceded by internal legal vetting, adherence to non-discriminatory processes, and the continuous reinforcement of independent commercial decision-making by members.

The Moment to Define the Future

As India crafts its next-generation regulatory framework for the digital financial services sector, fintech SROs must move beyond symbolic roles. They should act as industry stewards- responsible, forward-looking, and grounded in trust. To do so, they need to speak not with unchecked authority but with measured influence, built on market knowledge, stakeholder inclusivity, and a deep commitment to India’s fintech regulatory evolution.

- Abhishek Dubey is Vice President – Government, External Affairs and Public Policy at Home Credit India.