The NBFC Sector Just Got a Watchdog: RBI Approves FIDC as the Official Regulator
In a landmark decision, the Reserve Bank of India (RBI) has officially named the Finance Industry Development Council (FIDC) as the Self-Regulatory Organisation (SRO) for the crucial non-banking financial company (NBFC) sector.
This move is a huge step toward improving governance and trust across the NBFC landscape, which plays a massive role in India’s economy and financial inclusion efforts.
Why FIDC Was Chosen
The recognition falls under the RBI’s new Omnibus Framework for SROs, designed to strengthen compliance across various financial sectors. The RBI received three applications for the NBFC SRO status, but FIDC’s was the only one that met all the rigorous requirements, proving its readiness and credibility to represent the industry.
As an RBI-approved SRO, FIDC will effectively become the NBFC sector’s unified voice and ethical compass. Its new responsibilities are serious and far-reaching:
- Setting the Standard: Establishing sector-wide codes of conduct and ethical standards.
- Active Oversight: Proactively monitoring that NBFCs are adhering to RBI guidelines.
- Dispute Resolution: Stepping in to resolve issues within the industry.
- Coordination: Maintaining close ties with the RBI to tackle emerging challenges.
With a membership base of nearly 400 NBFCs—covering everything from housing finance to infrastructure financing—FIDC is perfectly positioned to represent the sector’s broad interests.
The Road Ahead
This new status gives FIDC significant authority to act as an extended arm of the regulator. It will focus on educating members, encouraging voluntary compliance, and supporting the sustainable growth of the industry.
The RBI is serious about this new role. It requires FIDC to secure at least 10% sector membership within two years. Failure to meet this or other obligations could result in the revocation of its SRO status.
Raman Aggarwal, CEO of FIDC, called this a “red-letter day,” emphasizing the organization’s commitment to strengthening the NBFC ecosystem.
Industry experts see this as a strong affirmation of the NBFC sector’s vital role in driving financial inclusion and supporting the government’s vision of a Viksit Bharat (Developed India). FIDC now joins existing SROs in the microfinance and fintech spaces, cementing a formal shift toward enhanced self-regulation, collaboration, and better oversight for customers.