FIDC recognised as Self-Regulatory Organisation for NBFCs by RBI, enhancing governance, regulatory compliance, and innovation in the non-banking financial sector in India.
RBI Recognises FIDC as Self-Regulatory Organisation for NBFCs
Introduction
On October 3, 2025, the Reserve Bank of India (RBI) officially recognised the Finance Industry Development Council (FIDC) as the Self-Regulatory Organisation (SRO) for Non-Banking Financial Companies (NBFCs). This landmark decision marks a significant step in enhancing the governance and regulatory framework of the NBFC sector in India.
What is FIDC?
The Finance Industry Development Council (FIDC) is a representative body of NBFCs registered with the RBI. Established over 16 years ago, FIDC has been actively engaged in policy discussions and has regular interactions with both the RBI and the Government of India. It represents a wide spectrum of NBFCs, including leading and medium-sized companies
RBI’s Omnibus Framework for SROs
In March 2024, the RBI introduced an Omnibus Framework for recognising SROs across various sectors. This framework aims to strengthen sectoral governance, ensure regulatory compliance, and promote innovation within industries. Following this, the RBI invited applications for SRO recognition in the NBFC sector. Out of three applications received, FIDC’s submission was the only complete and successful one, underscoring its preparedness and credibility
Role and Responsibilities of FIDC as an SRO
As an SRO, FIDC will oversee NBFCs by establishing industry standards and codes of conduct, monitoring compliance, resolving disputes, and acting as an intermediary between members and the regulator. This move aims to enhance regulatory compliance, encourage innovation, and support the development of the NBFC sector
Why This News is Important
Enhancing Sectoral Governance
The recognition of FIDC as an SRO is a significant step towards improving the governance of the NBFC sector. By establishing industry standards and codes of conduct, FIDC will ensure that NBFCs operate in a transparent and accountable manner, thereby enhancing investor and consumer confidence.
Promoting Regulatory Compliance
With FIDC overseeing compliance, NBFCs will be better equipped to adhere to regulatory guidelines set by the RBI. This will lead to a more robust financial system, reducing the risk of financial irregularities and enhancing the stability of the NBFC sector.
Encouraging Innovation
The SRO status will enable FIDC to foster innovation within the NBFC sector. By promoting best practices and encouraging the adoption of new technologies, FIDC will help NBFCs stay competitive and meet the evolving needs of consumers.
Supporting Sector Development
FIDC’s role as an SRO will support the overall development of the NBFC sector. Through its initiatives, FIDC will contribute to the growth of the sector, ensuring that NBFCs play a pivotal role in providing financial services to underserved segments of the population.
Strengthening Collaboration with RBI
As an SRO, FIDC will act as an intermediary between NBFCs and the RBI. This will facilitate better communication and collaboration, ensuring that the interests of both regulators and industry participants are aligned, leading to more effective regulatory oversight.
Historical Context
The concept of Self-Regulatory Organisations (SROs) has been prevalent in various sectors to ensure adherence to industry standards and regulatory compliance. In India, the RBI has been progressively recognising SROs to strengthen sectoral governance. Prior to FIDC, the RBI recognised the Fintech Association For Consumer Empowerment (FACE) as an SRO in the fintech sector, highlighting the central bank’s commitment to enhancing regulatory frameworks across industries
Key Takeaways from RBI Recognises FIDC as SRO for NBFCs
| S.No. | Key Takeaway |
|---|---|
| 1 | RBI has recognised FIDC as the Self-Regulatory Organisation for NBFCs, marking a significant step in enhancing sectoral governance. |
| 2 | FIDC will oversee NBFCs by establishing industry standards, monitoring compliance, and resolving disputes, ensuring a more robust financial system. |
| 3 | Out of three applications received, FIDC’s submission was the only complete and successful one, underscoring its preparedness and credibility. |
| 4 | The recognition aligns with RBI’s Omnibus Framework for SROs, introduced in March 2024, aiming to strengthen sectoral governance and promote innovation. |
| 5 | FIDC’s role as an SRO will support the overall development of the NBFC sector, contributing to the growth of the sector and ensuring financial inclusion. |
FAQs: Frequently Asked Questions
1. What is FIDC?
FIDC (Finance Industry Development Council) is a representative body of Non-Banking Financial Companies (NBFCs) in India. It engages with the RBI and the Government of India on policy matters and represents a wide range of NBFCs, including leading and medium-sized companies.
2. When was FIDC recognised as a Self-Regulatory Organisation (SRO)?
The RBI officially recognised FIDC as the SRO for NBFCs on October 3, 2025.
3. What is the role of FIDC as an SRO?
FIDC will establish industry standards, monitor regulatory compliance, resolve disputes among NBFCs, and act as a liaison between members and the RBI to promote governance, transparency, and innovation in the sector.
4. How many applications did RBI receive for NBFC SRO recognition?
RBI received three applications for recognition as an NBFC SRO. FIDC’s application was the only complete and successful one.
5. What is the RBI Omnibus Framework for SROs?
Introduced in March 2024, the framework provides guidelines for recognising SROs across various sectors to improve governance, ensure compliance, and promote innovation in the respective industries.
6. Why is FIDC’s recognition important for NBFCs?
It strengthens sectoral governance, ensures better compliance with RBI regulations, encourages innovation, enhances consumer and investor confidence, and supports financial inclusion in India.
7. Has RBI recognised SROs in other sectors before?
Yes, RBI recognised the Fintech Association for Consumer Empowerment (FACE) as an SRO in the fintech sector, showcasing its commitment to strengthening regulatory frameworks across industries.
8. How will FIDC promote innovation in the NBFC sector?
FIDC will encourage best practices, adoption of new technologies, and process improvements, helping NBFCs stay competitive and address evolving market needs.
9. What kind of NBFCs does FIDC represent?
FIDC represents a wide spectrum of NBFCs, including asset finance, loan companies, microfinance, housing finance, and other medium to large financial institutions.
10. Where can one find more information about FIDC?
Official information is available on the FIDC website:
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