RBI sets the ball rolling for a self-regulatory body for account aggregators

RBI seeks applications for SRO on AA

The Reserve Bank of India (RBI) has called applications for a self-regulatory organisation (SRO) for the Account Aggregator (AA) ecosystem.

The account aggregator framework, introduced in September 2016, facilitates the secure exchange of financial information between various entities. The interested parties should apply through the PRAVAAH portal before June 15, the RBI said in an announcement on March 12.

“The AA ecosystem is distinct in its complexity, involving the exchange of data among a diverse array of regulated entities (REs) operating under varied regulatory environments. This complexity necessitates frequent coordination among these REs to address various operational issues such as dispute resolution, standardised agreements and common services,” the RBI said in the note.

The framework involves Non-Banking Financial Company-Account Aggregators (NBFC-AAs) acting as intermediaries between Financial Information Providers (FIPs) and Financial Information Users (FI-Us).

The entities coming under the AA ecosystem are regulated by various bodies including the RBI, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority of India, and the Pension Fund Regulatory and Development Authority of India. The revenue department is also deemed the regulator for the Goods and Services Tax Network within this ecosystem.

“To support smoother adoption and stabilisation, the RBI has determined it is desirable to have a dedicated SRO for the AA ecosystem,” the regulator said.

The Department of Regulation of the RBI has issued a “Framework for Recognising Self-Regulatory Organisation(s) for the Account Aggregator Ecosystem (SRO-AA).” This framework details the characteristics, responsibilities, eligibility criteria, and governance aspects of the SRO-AA.

The SRO-AA will operate within the existing regulatory framework for the AA ecosystem, the central bank said. While the technical specifications will continue to be framed and published by Reserve Bank Information Technology Private Limited (ReBIT).

The regulator’s decision will be final unless it asks for resubmission.

Last August, RBI recognised the Fintech Association for Consumer Empowerment (FACE) as Self-Regulatory Organisation in the FinTech Sector (SRO-FT).

In February, the country’s largest mobile payments firm PhonePe Group decided to exit the account aggregator business and surrender its NBFC-AA licence, citing a shift in focus to other business areas and a plan to partner with existing aggregators.