Context:
India Fintech Foundation (IFF), a proposed self-regulatory organisation (SROFT), was announced at Startup Mahakumbh in Delhi. Its core mission is to enable responsible innovation and establish ethical and operational standards for fintechs operating in India.
Strategic Relevance
India’s fintech landscape is expanding at breakneck speed. IFF’s introduction is a timely step toward creating a structured, industry-backed compliance and innovation framework. With the RBI already recognising FACE as an SROFT, IFF enters a critical regulatory conversation.
- Sector Growth: Rapid scaling creates systemic risks without oversight
- Regulatory Gap: IFF aims to bridge the gap between innovators and regulators
- Timing: RBI recognition of FACE makes the SROFT space competitive
- Market Demand: Rising urgency for responsible innovation, consumer trust, and data governance
Mission and Role of SROFT-DF
- Promote responsible innovation in fintech
- Set industry-wide ethical and operational standards
- Function as a link between regulators and fintech players
“If innovation is not responsible, it can result in accidents,” said Viswanathan, emphasizing the need for structured self-regulation.
Government and Industry Support
- Amitabh Kant (India’s G20 Sherpa) endorsed the role of SROs in ensuring sustainable fintech growth
- Current Membership: 100 fintech companies
- Positioned as a key element in India’s Viksit Bharat@2047 vision
Regulatory Landscape
- RBI has already recognised Fintech Association for Consumer Empowerment (FACE) as an SRO-FT
- Digital Lenders Association of India (DLAI) is rebranding as the Unified Fintech Forum
- SROFT-DF adds to the ecosystem as a new entrant focused on ethical innovation and compliance
Fintech Sector Outlook
- India hosts 10,244 fintech entities
- Funding has declined for 3 consecutive years:
- 2024: $1.9 billion (228 rounds)
- 2023: $2.8 billion (324 rounds)
- Peak in 2021: $8.3 billion (665 rounds)
- Source: Tracxn
Policy & Industry Implications
- Self-Regulation as a Strategic Lever
- Quote from Amitabh Kant, G20 Sherpa: “The pivotal mechanism to foster ethical growth in fintechs is the establishment of self-regulatory organisations.”
- IFF’s Role:
- Setting industry-wide norms for responsible innovation
- Driving fintech alignment on KYC, risk management, and data ethics
- Creating a channel for ongoing dialogue with regulators
- Potential Overlap with FACE:
- IFF’s legal standing is yet to be confirmed. This raises important questions around whether it will collaborate, compete, or coexist with FACE, the RBI-recognised SROFT.
Forward-Looking Assessment
- Regulatory Recognition:
- IFF’s success hinges on formal endorsement from the RBI
- Standardisation Impact:
- It could define best practices for governance, compliance, and operational resilience across fintechs
- SME Engagement:
- IFF’s 100-member base gives it scale, but it must now establish enforcement credibility
- Institutional Coordination:
- Collaboration with key government agencies will be essential to gain influence and deliver on its mandate
India Fintech Foundation represents a pivotal institutional development for the fintech ecosystem. If officially recognised, it can serve as a regulatory compass, balancing compliance with innovation. Its future depends on navigating existing SRO dynamics and building institutional authority through strategic policy engagement.
