INDIA Trends and Developments Contributed by: Shilpa Mankar Ahluwalia, Purva Anand and Ansh Jain, Shardul Amarchand Mangaldas & Co
For India, these developments offer reference models if India chooses to recognise, restrict or prohibit spe - cific classes of stablecoin activity. The central bank has highlighted the risks to monetary sovereignty that large-scale private stablecoins could pose. At the same time, public statements note that a CBDC can deliver many of the efficiency gains claimed for stablecoins without importing those risks. Any move to recognise certain stablecoins for limited uses would likely mirror the emerging global consensus: full-reserve backing in high-quality liquid assets, daily redeemability at par, robust governance, segregation and audit, and tight restrictions on use cases. The RBI’s Regulatory Consolidation and Self- Regulatory Framework India’s fintech rules have been reshaped by two big changes: • a comprehensive clean-up and consolidation of regulatory instructions; and • the creation of self-regulatory organisations (SROs) across the fintech ecosystem. In November 2025, the RBI completed a comprehen - sive consolidation of its directions. The outcome is 244 consolidated Master Directions, organised by function and by type of regulated entity across 11 categories, from commercial banks and non-banking financial companies to co-operative banks and asset reconstruction companies. In parallel, 9,446 circulars were repealed or withdrawn as obsolete or subsumed. This is not a policy rewrite but an “as is” rationalisa - tion. Overlapping texts were consolidated. Entity-spe - cific responsibilities were brought together within each Master Direction. Fragmented regulations in the form of Annexes, FAQs and illustrations were consolidated into the main text. For regulated entities and even fintechs, the benefits of clear regulations are immediate and real. The second big change is formal self-regulation. In 2024, the RBI finalised a framework for SROs in fin - tech and began granting recognitions. It has recently recognised three SROs covering different segments:
• the Fintech Association for Consumer Empower - ment for the broader fintech sector; • the Finance Industry Development Council for non- banking financial companies; and • the Self-Regulated PSO Association for payment system operators. These SROs have several roles. They develop indus - try standards and best practices, encourage member compliance and act as intermediaries between indus - try and the RBI. Through consultations, feedback and policy dialogues, they keep communication open and help fintechs stay aligned with regulatory expecta - tions. They collect sectoral data and share it with the RBI to support policymaking. They also alert the regu - lator to member violations or wider systemic issues. SROs are also obligated to set up dispute resolu - tion frameworks for members and maintain surveil- lance for effective monitoring. The RBI expects them to go beyond narrow member interests and address broader sector concerns. This marks a shift from ad hoc engagement to an institutional model of industry- regulator dialogue. Together, consolidation and SROs make the regulato - ry landscape easier to navigate and more responsive. Ambiguity is reduced, compliance costs are lower, and there is now a formal channel for industry to help shape practical, effective rules. Artificial Intelligence in Financial Services The growing use of artificial intelligence (AI) in India’s financial sector has drawn regulatory focus, and the RBI has set out a comprehensive framework to guide responsible deployment. In December 2024, the RBI set up a committee to develop a Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI). The committee included experts from technology, aca - demia and financial services. It ran surveys and con - sultations with regulators, financial institutions and technology experts before submitting its report in August 2025. The committee found that about 21% of surveyed institutions – mainly large public and private sector
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