RBI floats draft framework for account aggregator NBFCs

In order to put in place the regulatory framework to allow a new kind of Non-Banking Financial Company (NBFC), which could act as an account aggregator, the Reserve Bank of India (RBI) has released a draft of the directions (Non-Banking Financial Company - Account Aggregator (Reserve Bank) Directions, 2016).

In its draft framework, RBI has stated that only companies registered with the RBI as NBFC–AA will be able to undertake the business of an account aggregator and the net owned fund of such companies should not be less than Rs 2 crore and they cannot provide any services other than account aggregation. RBI will regulate and supervise the activity of account aggregation while adding that entities being regulated by other financial sector regulators and aggregating only those accounts relating to the financial assets of that particular sector will not need to register with the RBI.

Account aggregators help in collecting and providing the information of customers’ financial assets in a consolidated, organised and retrievable manner to the customer or any other person as per the instructions of the customer. At present, persons holding financial assets, such as, savings bank deposits, fixed deposits, mutual funds, insurance policies, do not get a consolidated view of their financial asset holdings, especially when the entities fall under the purview of different financial sector regulators. Account Aggregators would fill this gap by collecting and providing the information of customers’ financial assets in a consolidated, organised and retrievable manner to the customer or any other person as per the instructions of the customer. The investors will be able to avail the service of an account aggregator purely at their option.

Initially, only financial assets whose records are stored electronically and are under the regulation of the financial sector regulators -- RBI, SEBI, IRDA, and PFRDA -- would be considered for aggregation. The draft has further said that the NBFCs would provide account aggregation services in response to a specific application by the customer for availing such services and would be backed by appropriate agreements and authorizations.