In January 2026, the Reserve Bank of India (RBI) recognised the Foreign Exchange Dealers’ Association of India (FEDAI) as a Self-Regulatory Organisation (SRO) for all Authorised Dealers (ADs) under the Omnibus Framework for Self-Regulatory Organisations (SROs) of the RBI.
Exam Hints:
- What? Foreign Exchange Dealers’ Association of India (FEDAI) recognised as a Self-Regulatory Organisation (SRO).
- By Whom? Reserve Bank of India (RBI).
- Target Group: All Authorised Dealers (ADs) in the Foreign Exchange (Forex) market.
- Transition Period: One year to align with the Omnibus SRO framework.
- Other approval: RBI granted in-principle approval to SMBC to set up WOS in India.
- Legal Provision: Section 22(1) of the Banking Regulation Act, 1949.
RBI Recognition of FEDAI as SRO:
Recognition: RBI formally recognised FEDAI as a SRO based on its long-standing role in governing conduct in the foreign exchange (Forex) market.
Role: As an SRO, FEDAI will frame standards, promote best practices, ensure ethical conduct, and monitor compliance among Authorised Dealers.
Oversight: FEDAI will function under the overall regulatory supervision of the RBI while acting as an interface between the regulator and market participants.
Framework: The Omnibus SRO Framework aims to strengthen self-regulation, enhance accountability, ensure consistency, and reduce RBI’s regulatory burden.
Transition: RBI has granted FEDAI one year to align its governance and operations with Omnibus SRO requirements, including system upgrades and transparency enhancements.
Membership: FEDAI must expand its membership to include all categories of ADs to ensure inclusive forex market representation.
RBI Approves Japan’s SMBC to Set Up Wholly Owned Subsidiary in India
In January 2026, the Reserve Bank of India (RBI) granted in-principle approval to Japan-based Sumitomo Mitsui Banking Corporation (SMBC) to establish a wholly owned subsidiary (WOS) in India under the RBI (Setting Up of Wholly Owned Subsidiaries by Foreign Banks) Guidelines, 2025.
SMBC WOS Conversion in India:
Regulation: The final banking licence will be issued under Section 22(1) of the Banking Regulation Act, 1949, upon fulfillment of RBI conditions.
Conversion: SMBC operates four branches in New Delhi (Delhi), Mumbai (Maharashtra), Chennai (Tamil Nadu, TN), and Bengaluru (Karnataka) and an office at the Gujarat International Finance Tec-City – International Financial Services Centre (GIFT City IFSC), which are proposed to be converted into a locally incorporated WOS in India.
Capital: The WOS must be established as a separate legal entity in India with a local board, ring-fenced assets and liabilities, and commence operations with a minimum paid-up voting equity capital of Rs.500 crore.
Benefits: The WOS model provides greater operational flexibility, enhanced RBI oversight, and scope for mergers and acquisitions subject to a 74% foreign investment limit.
Peer Comparison: SMBC becomes the fourth foreign bank approved for the WOS model in India, after DBS Bank India, SBM Bank India, and Emirates NBD.
Foreign Exchange Dealers’ Association of India (FEDAI):
Chairman – Srinivasa Panigrahi (Chief General Manager (CGM), Global Markets at State Bank of India, SBI)
Headquarters – Mumbai, Maharashtra
Established – 1958
