MFIN as an SRO

In 2014, the Reserve Bank of India (RBI) recognized MFIN as a Self-Regulatory Organization (SRO) for the NBFC-MFI, making MFIN the first industry association to be accorded recognition as an SRO by the RBI.

Under the SRO function, MFIN’s primary objective is to support member NBFC-MFIs in adhering to regulatory and industry standards, with focus on customer welfare and protection.

Master Directions of RBI for the NBFC-MFIs encourage them to become a member of at least one SRO recognized by the RBI and to comply with the Code of Conduct prescribed by the SRO. The Direction while entrusting the responsibility for compliance to all regulations with the NBFC-MFIs themselves, also see industry associations/SROs playing a key role in ensuring compliance with the regulatory framework.

As an SRO, MFIN reports to the RBI on a quarterly basis on the industry including operational and financial trends, customer complaints, non-compliances, actions taken and emerging issues, among other things.

Frame Rules and Standards
Develop Capacities
Monitor and Enforce
Redress Customer’s Grievances

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Governance

Overall SRO function within MFIN is governed by two committees, Enforcement Committee and Self-Regulatory Organization Committee (SROC). The committees guide, oversee and support the SRO team to effectively carry out the SRO function.

The Enforcement Committee (EC) primarily handles issues of non-compliances and grievances arising from customers requiring redressal.

The Self-Regulatory Organization Committee (SROC) provides oversight and direction to all the SRO functions and acts as the appellate body for EC decisions.

In line with standards of governance, both these committees are constituted with majority independent members and chaired by an independent member. However, both committees also have representation from the industry to bring a practical perspective. These committee work under an Enforcement Framework outlined by the Board and the Board gets regular updates on relevant information about their work and decisions.