By Sayan Sen

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The Fintech Association for Consumer Empowerment (FACE), a self-regulatory organisation recognised by the Reserve Bank of India (RBI), has rolled out new whistleblower guidelines to tighten oversight in one of the country’s fastest-growing financial sectors.

The standards draw on existing laws and global best practices, providing fintech companies with a framework to establish internal reporting systems for employees and stakeholders to flag misconduct. The guidelines emphasise protections against retaliation, formal oversight procedures, and stricter documentation requirements.

The framework requires at least two secure channels for complaints, including an anonymous option, and mandates acknowledging complaints within seven working days. Investigations should normally conclude within 90 days, extendable by another 90-day period following approval from the audit committee. Companies must submit quarterly summaries to both their audit panels and FACE, which will escalate findings to the RBI, if necessary.

The frameworks also specify protections for employees and third parties who raise concerns, establish confidential reporting channels to the compliance officer or audit committee, and bar retaliation against whistleblowers. Complaints are reviewed by the audit committee, which oversees investigations and recommends disciplinary action when warranted.

Other provisions include protections for whistleblowers from discrimination or dismissal, mandatory annual training, and impartial investigations that may involve third-party professionals. Companies are also required to maintain a centralised, secure database of complaints and outcomes.
FACE, which represents more than 275 fintech firms, said the initiative is designed to institutionalise whistleblowing as part of corporate culture. “We hope that by adopting these guidelines, fintechs can become pro-whistleblower, improving corporate oversight and the business,” said FACE CEO Sugandh Saxena in a statement.

“Evidence shows that a functional whistleblower-friendly mechanism is good, as such alarms and alerts help companies avoid the worst early enough. For fintechs, whistleblowing can be the leading oversight mechanism for uncovering the wrongdoings and malpractices, ahead of audits or external reviews across business functions,” she added.

Most large listed fintechs already have a whistleblower framework in place, and the framework is rooted in the Companies Act, 2013, SEBI’s Listing Obligations and Disclosure Requirements, the SEBI Act, 1992, and insider trading regulations.
(Edited by Kanishk Singh)