FIDC to oversee NBFCs as ‘self-regulatory body’
SROs are designed to complement statutory regulations, establish industry standards, draft codes of conduct, oversee compliance, settle disputes, and serve as intermediaries between members and the regulator.
They must operate with independence, credibility, and sound governance, while keeping RBI informed through regular reporting and annual returns.
To qualify, an SRO must be a Section 8 not-for-profit, with diversified shareholding, sufficient net worth, and either broad sector representation or a credible plan to achieve it.
Its directors must meet fit-and-proper criteria, and boards are required to include at least one-third independent members, supported by adequate human and technical resources.The NBFC, despite accounting for nearly a third of lending activity has not had an SRO.
However, segments of non-banks including microfinance institutions and digital lenders have their own SRO for some time.
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