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Who are Account Aggregators?

Reserve Bank of India (RBI) has updated the directions for non-banking financial companies undertaking the business of account aggregator.

Who is Account Aggregator (AA)?

“Account Aggregator” means a non-banking financial company (NBFC) as notified under section 45-I of Reserve Bank of India (RBI) Act, 1934, that undertakes the business of an account aggregator, for a fee or otherwise.

“Business of an account aggregator” means the business of providing under a contract, the service of - 

  • Retrieving or collecting financial information pertaining to its customer and;
  • Consolidating, organizing and presenting such information to the customer or any other financial information user.
In simple words, the financial information providers share the financial information of a customer with an Account Aggregator for transferring it to the customer or a financial information user.

What is financial information?

“Financial Information” means information in respect of the following with financial information providers -

  1. Bank deposits including fixed deposit accounts, savings deposit accounts, recurring deposit accounts and current deposit accounts
  2. Deposits with NBFCs
  3. Structured Investment Product (SIP)
  4. Commercial Paper (CP)
  5. Certificates of Deposit (CD)
  6. Government Securities (Tradable)
  7. Equity Shares
  8. Bonds
  9. Debentures
  10. Mutual Fund Units
  11. Exchange Traded Funds
  12. Indian Depository Receipts
  13. Collective Investment Schemes (CIS) units
  14. Alternate Investment Funds (AIF) units
  15. Insurance Policies
  16. Balances under the National Pension System (NPS)
  17. Units of Infrastructure Investment Trusts
  18. Units of Real Estate Investment Trusts
  19. Goods and Services Tax (GST) Returns, viz. Form GSTR-1 and Form GSTR-3B

Who is financial information provider?

“Financial information provider” means bank, banking company, non-banking financial company, asset management company, depository, depository participant, insurance company, insurance repository, Central Recordkeeping Agency, Goods and Services Tax Network (GSTN), Clearing Corporation of India Limited (CCIL).

(Updated on February 26, 2024)

CCIL has been included as a Financial Information Provider to provide financial information on Government Securities held by retail investors in their Retail Direct Gilt accounts under Retail Direct Scheme.

Who is financial information user?

“Financial information user” means an entity registered with and regulated by any financial sector regulator.

Who are financial sector regulators?

“Financial Sector regulator” would include Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA), Pension Fund Regulatory and Development Authority (PFRDA) and Department of Revenue, Ministry of Finance.

Who can operate as Account Aggregator (AA)?

  • Only a company shall undertake the business of an Account Aggregator.
  • Company shall commence or carry on the business of an Account Aggregator only after obtaining a certificate of registration from RBI.
  • Entities regulated by other financial sector regulators and aggregating only those accounts relating to the financial information pertaining to customers of that particular sector are excluded from the registration requirement.
  • The validity of the in-principle approval issued by RBI is 12 months from the date of granting such in-principle approval.

What are pre-requisites for registration as Account Aggregator (AA)?

  • Every company seeking registration as an Account Aggregator shall have a net owned fund of at least ₹2 crore.
  • Companies not having a net owned fund of minimum of ₹2 crore at the time of seeking registration, shall meet the net owned fund criteria within the validity period of the in-principle approval (for grant of registration certification) given by RBI.
  • The company shall have a leverage ratio of less than 7.

What are the guidelines for investments from FATF non-compliant jurisdictions?

  • Fresh investors (directly or indirectly) from Financial Action Task Force (FATF) non compliant jurisdictions in aggregate should be less than 20% of the voting power of the NBFC-AA.
  • Investors in existing NBFC-AAs holding their investments prior to the classification of the source or intermediate jurisdictions as FATF non-compliant, may continue with the investments or bring in additional investments so as to support continuity of business in India.

What are guidelines for customer services by Account Aggregator (AA)?

  • Financial information of the customer shall be retrieved, shared or transferred by the Account Aggregator only with the explicit consent of the customer.
  • An Account Aggregator shall also provide its customers a functionality to revoke consent to obtain information or parts of information.
  • An Account Aggregator shall enable the customer to access a record of the consents provided by him and the financial information users with whom the information has been shared.
  • Customer complaints shall be handled / disposed of by the Account Aggregator within one month from its receipt. If the complaint / dispute is not redressed within one month, the customer may appeal to RBI.

What are other updates in the directions?

  • It was observed that certain entities, which are eligible to join Account Aggregator ecosystem as financial information provider, have on-boarded as financial information user only. Consequently, such entities are accessing financial information from other financial information providers but are not providing the financial information held by them. In view of this, regulated entities of RBI joining the Account Aggregator ecosystem as financial information user shall necessarily join as financial information provider as well, if they hold the specified financial information and fall under the definition of financial information provider.
  • As per NPS architecture, Central Recordkeeping Agency (CRA) acts as an interface between the different intermediaries in the NPS system. CRAs hold information pertaining to the subscribers including the balances under NPS. Accordingly, and as suggested by PFRDA, ‘Pension Fund’ has been replaced with ‘Central Recordkeeping Agency’ as the financial information provider.


References

Government of India. (2021, September 10). 'Know all about Account Aggregator Network- a financial data-sharing system'. Retrieved from https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1753713

Reserve Bank of India. (2016, September 02). 'Master Direction - Non-Banking Financial Company - Account Aggregator (Reserve Bank) Directions, 2016 (Updated as on February 22, 2024)'. Retrieved from https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10598

Reserve Bank of India. (2023, October 26). 'Joining the Account Aggregator Ecosystem as Financial Information User'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12558&Mode=0

Reserve Bank of India. (2023, October 26). 'Review of Financial Information Provider (FIP) under Account Aggregator Framework'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12557&Mode=0

Reserve Bank of India. (2024, February 22). 'Inclusion of Clearing Corporation of India Limited as a Financial Information Provider under Account Aggregator Framework'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12611&Mode=0


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